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Ofgem awards clean power trio permanent price cap derogation

Image: Getty.

Image: Getty.

Clean power suppliers Good Energy, Ecotricity and Green Energy UK have been awarded permanent derogations from Ofgem’s price cap by the regulator.

Those agreements mean their respective standard variable tariffs will not have to comply with Ofgem’s controversial tariff cap in a move designed to prevent any hindrance to the procurement of renewable energy.

At the start of the year the three suppliers were given temporary derogations until 31 March, agreements which were then extended until 1 September pending further work by Ofgem.

However all three companies have today been issued enduring derogations from the price cap, which will last until the price cap is removed in 2023.

Juliet Davenport, chief executive at Good Energy, said the derogations were important so that individuals are “empowered to be part of the solution” to climate breakdown.

“We know customers want the ability to make that choice, and recently it has been complicated by energy companies taking shortcuts to offer cheap ‘green’ tariffs.

“When you choose a renewable tariff, you are choosing more than ‘net zero’ or some cheap certificates. You are choosing regeneration — support for the growth of clean energy. Ofgem’s decision recognises that Good Energy’s model does precisely this.”

Davenport has been a vocal critic of alleged workarounds or shortcuts to establishing clean energy tariffs, taking particular aim at Shell Energy earlier this year after it was able to switch all of its customers to clean energy supply overnight by purchasing Renewable Energy Guarantee of Origin (REGO) certificates, rather than generating or procuring renewable power directly.

Last month Mark Hollands, energy strategy director at renewables developer BSR Energy, wrote for Current± on the subject of REGOs calling for a fresh approach to the system.

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