ScottishPower and Good Energy are calling for regulatory reforms to close “loopholes” in the energy retail market that allow for greenwashing.
Greenwashing – a process whereby companies seek to make their products seem more environmentally friendly than they are – includes the use of renewable energy certificates without direct connection to the source through a Power Purchase Agreement (PPA) or investment into green energy, according to the two suppliers.
Many suppliers sell ‘green energy’ utilising these renewable certificates, but this is misleading customers they continued.
They pointed to separate research published last week by consultancy Baringa, which found that around a third of electricity supplied through green or renewable tariffs is greenwashed. This report was undertaken in partnership with a number of suppliers, with these being Bulb, British Gas, E.On, Good Energy, npower, Pure Planet, ScottishPower and Shell Energy Retail.
Good Energy and ScottishPower are now calling on Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) to improve transparency on green tariffs with a legal requirement to explain the type of tariff suppliers are selling.
Additionally, minimum standards should be set on what can be classed as green energy, with detailed guidance accompanying it.
BEIS and Ofgem should also stop exempting suppliers that buy EU-based energy certificates from paying what ScottishPower and Good Energy said is “their fair share” of UK renewable support costs. Lastly, there should be a ban on non-PPA based tariffs from being called green.
Andrew Ward, CEO of ScottishPower Retail, warned that consumers are being “misled by too many energy companies”, adding that if greenwashing is allowed to continue it “risks the UK’s position – hard won – as a world leader in green technologies and tackling climate change” particularly ahead of COP26, set to be held in Glasgow in November.
This is not the first time either supplier has sought to tackle greenwashing, with ScottishPower’s announcing in February 2020 that all of its new domestic fixed price tariffs will use 100% renewable energy sourced entirely from its own wind farms as part of an effort to “call time” on greenwashing.
Meanwhile, Good Energy has been a very vocal critic of greenwashing, most recently calling on Ofgem to update the licensing condition to reinstate the link between PPAs and customers.