Raman Bhatia, the CEO of utility OVO, will today (18 April) outline a new path to “get the UK’s net zero mission back on track” including a new customer plan and kitemarking system alongside the removal of Renewable Energy Guarantees of Origin (REGOs).
The path, to be announced during an event today hosted by Friends of the Earth, Cornwall Insight, Ethical Consumer and Energy Saving Trust, is set to help set the UK get back on track to achieve it’s carbon targets which, Bhatia will say, the nation is currently set to miss.
A new kitemark system for the green tariff market
The system-wide reformation of energy industry practises set out by OVO includes a call to help customers avoid ‘greenwashing’ practises in the energy market.
This follows data from OVO-commissioned research which showed “confusion and mistrust” amongst the public towards 100% renewable tariffs.
According to the collected data, 68% of consumers distrust the validity of tariffs marketed to offer greener energy.
The research also revealed that 81% of people are under the impression that ‘100% renewable electricity’ tariffs backed by REGOs support renewable energy projects through funding, which OVO said is not the case.
To remedy this, OVO will propose a new kitemark system to identify which tariffs directly support renewable energy and decarbonisation.
Remove REGO and tariff greenwashing
According to research commissioned by OVO and conducted by Cornwall Insight, REGOs “provide little to no benefit to renewable energy generation, and will instead soon become a drain on customer finances if their use is continued.”
According to OVO the rising price of REGOs could mean £10 billion is spent on them in 2030.
Reacting to the data, OVO will “immediately end the use of REGOs” focussing instead on insulating British homes, which the energy provider said lose heat three times faster than European households.
Despite welcoming the UK Government’s commitment to insulated 300,000 of the country’s least energy efficient homes, OVO maintained that the country must move faster.
“The potential for REGOs to increase renewable electricity generation has not been well understood by consumers. It was not their original purpose, and Cornwall Insight research has shown they have had little to no impact on growing green electricity production,” said Tom Andrews, senior consultant at Cornwall Insight.
“At a potential cost of £1.4 billion to GB energy consumers, it’s important to understand the role of the REGO scheme in tracking green electricity from generators to consumers. Government subsidy schemes have supported the vast majority of renewable electricity generation, with the cost paid for through green levies on people’s energy bills. There is much discussion on the viable options for replacing REGOs, however, the very fact OVO are holding the conversation is a positive development for consumers who want to support the growth of renewable energy, as well as the UK’s journey to net zero.”
‘Path to Zero’ customer plan
Today will also see OVO announce its new customer plan, ‘Path to Zero’ to offer its customers free or heavily discounted green tech (i.e. smart thermostats). The scheme will also support customers through advice on home insulation, free tracking on energy usage and paying them to use energy outside of peak hours – this will be done through its ‘Power Move’ scheme.
Alongside this, OVO will launch to a new £10 million Green Skills Academy to address the UK’s green skills shortage. The plan will combine future skills, education and apprenticeship programmes.
OVO’s ‘Path to Zero’ will replace the 100% renewable tariff backed by REGOs by:
- Granting customers one energy saving product of their choice a year
- Allow customers to track their energy usage through the OVO app – this will also tell them the greenest time to use energy
- Reward customers for using energy at green times through Power Move
- Partner with Woodland Trust and The Conservation Volunteers to plan 1 million trees in the UK a year
In a speech today, Raman Bhatia, CEO of OVO, is expected to say: “I am the CEO of an energy supplier, and I want our customers to use less energy. I want them to pay us less for their heating, lighting, and power each month. And I want us to help get the UK back on track to meet our climate targets, which demand a 78% reduction from 1990 levels by 2035.
“Greenwashing is a luxury no one can afford. By making this change we’ll save consumers money and reinvest in true green energy, and we hope others will follow our lead.”
