Ofgem proposes improvements to green tariffs to improve protection for consumers
27 Jun 2014 04:10 PM
- Suppliers will need to
be clear about whether or not green tariffs provide environmental
benefits
- Calls for suppliers to
improve transparency about what these tariffs offer and provide better evidence
that they are supplying renewable power
- Announcement is a
further step forward following Ofgem’s commitment to make the energy
market simpler, clearer, fairer
Ofgem is proposing changes to
the green tariffs market to ensure that consumers are empowered in making the
right decisions. These changes will ensure that suppliers clearly inform their
customers and provide evidence of whether or not there will be environmental
benefits from a particular tariff.
The voluntary Green Supply
Guidelines were developed by Ofgem in 2009 and then implemented through the
independent “Green Energy Supply Certification Scheme”. This
ensured that consumers choosing a certified green tariff could be confident
that it provides environmental benefits. Now an increasing number of tariffs
that make environmental claims are uncertified, leaving the majority of
consumers unable to distinguish between those tariffs with and without
environmental benefits.
Following research with
consumers and to make these tariffs simpler, clearer and fairer, Ofgem is
proposing three key principles that green tariffs will need to follow in the
future:
Transparency&nbs
p;- To help consumers understand the market better, we are asking suppliers to
clearly say if a green tariff does not offer any environmental benefit other
than those that consumers already pay for through costs embedded in their
energy bill or through taxation. This includes publishing an annual report on
how they are providing environmental benefits or being clear to consumers if it
doesn’t.
Environmental
benefits – Suppliers will need to show that environmental
benefits happen because consumers chose a tariff and not solely due to
subsidies or supplier obligations. This requirement will protect consumers but
will also allow suppliers flexibility and opportunities to
innovate.
Evidence of
Supply - Suppliers must have evidence that verifies where the
electricity supplied in a tariff comes from. This means that they must show
they have enough Renewable Energy Guarantees of Origin certificates and have
retired any other certificates for the same products.
Sarah Harrison, Senior
Partner for Sustainable Development at Ofgem said:“We believe
these changes will give consumers confidence to make more informed decisions
about buying tariffs based on renewable supply.”
Following consultation, Ofgem
aims for these changes to be fully in place by 1 April 2015.
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Notes to
editors
1. View our
consultation: Protecting Domestic
Consumers in the Green and Renewable Tariffs Market – Final
Proposals.
2. About
Ofgem
Ofgem is the Office of the Gas
and Electricity Markets, which supports the Gas and Electricity Markets
Authority, the regulator of the gas and electricity industries in Great
Britain. The Authority's functions are set out mainly in the Gas Act 1986,
the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000.
In this note, the functions of the Authority under all the relevant Acts are,
for simplicity, described as the functions of Ofgem.
For further press
information contact:
Lisa
O’Brien:
020 7901 7426
Dafydd Wyn: 020 3263
9943
Out of hours media contact
number: 07766 511470