UK consumer watchdog attacks green power claims

LONDON, England, January 10, 2007 (Refocus Weekly) Most ‘green tariffs’ in Britain do not supply the environmental benefits claimed by electricity suppliers, according to the National Consumer Council.

Many consumers say they are happy to pay a premium for green power, the group and its consumer watchdog, ‘energywatch,’ explain in an investigation into the claims of leading suppliers. The report, ‘Reality or rhetoric? Green tariffs for domestic consumers,’ calls on residential power suppliers to be more honest and to explain clearly the real environmental benefits.

The NCC says suppliers fail to explain that they are obliged by government targets to generate 10% of their energy from renewables by 2010, and 20% by 2020. The Renewables Obligation means each home in Britain already pays for £7 of green energy every year under traditional tariffs, and that many green tariffs do no more to help the environment.

Suppliers then match the consumption of green power customer to the level of renewables and sell it as a green tariff, often at extra cost to the customer. The result is that no more renewable energy is generated when customers sign up to a green tariff than was being generated anyway, the report claims.

“Our investigation shows that it's too easy for consumers to be confused and misled,” says NCC chairman Lord Larry Whitty. “They may think they are helping save the planet, but it's not clear that they are.”

“We're calling for a shake up in how companies market and sell their green tariffs, and for them to offer bigger environmental benefits,” he adds. “Even the better tariffs would only cut the CO2 emissions of a typical household by around 6%.”

The report also criticizes suppliers for allowing customers to believe that green power plans which offset carbon emission would compensate for all the carbon they produce. The NCC says a green tariff that plants a tree on behalf of the consumer, would not contribute anywhere near the total GHG emissions of the household.

“It seems bizarre that in the age of green consumerism, only 1% of consumers are signed up to green energy tariffs,” says Adam Scorer of energywatch. “But dig a bit deeper and you can see how maddeningly complex and confusing some of these products are.”

NCC and energywatch will press energy suppliers to set minimum standards for green claims and to have their tariffs and CO2 savings independently audited. They say such a standard would eliminate unsubstantiated claims and offer accurate and comparable information about the environmental benefits offered and the carbon emissions saved.

“Only with such independent scrutiny will consumers have confidence that switching to a green tariff will make a real difference, allowing the market for greener energy to take off,” says Lord Whitty.

The NCC also expressed concerns that ‘green supply’ guidelines issued by the energy regulator in 2002 are being poorly enforced. The Advertising Standards Authority recently ruled that one supplier had misleading CO2 offset claims, but the ASA can act only in response to complaints, leaving many misleading claims unchecked, the group notes.

In 2004, the average household in Britain emitted 6 tonnes of CO2; 1.7 t from electricity and 4.3 t from natural gas. Green power is “vital” in reducing CO2 emissions but less than 1% (200,000 homes) purchase green power, the report notes.

A recent poll suggests 64% of respondents would consider switching to a green energy company but, to fulfill this potential, “consumers must have clear, unambiguous information about what is on offer, and confidence that green tariffs will deliver what they promise,” the report explains. “Only then will consumer confidence levels rise to a point where the market for greener energy can succeed.”

“Over the past five years, self-regulation has not delivered an effective market in green tariffs,” it concludes. “Suppliers are not making it clear that consumers are already supporting increased renewable electricity through their electricity bills, by around £7 per household in 2005/6, rising to £20 in 2010/11. Consumers should be made aware of this; this will make the situation far clearer for suppliers who design green tariffs and for consumers who sign up to them.”


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