UK Wind Energy Controversy Continues


Image credit: Zerocarbonista
UK Wind Energy Suppliers Continue their Public Row
Last week I reported on the open and heated public controversy between UK wind energy suppliers Good Energy and Ecotricity. The drama is far from over. The details are complicated, but important. Both companies have followed a different approach to renewable energy supply, with Good Energy purchasing 100% renewable energy and selling it on to the customer. Ecotricity, on the other hand, have argued that it is not the percentage of renewables a company supplies that matters - but rather it's the percentage of new renewables a company builds that really helps in the fight against climate change (see my interview with Dale Vince for his views on this distinction). But that's not the question at the heart of this disagreement. Ecotricity are arguing that, even if Good Energy's model where the most effective, the company has been less than honest about its actual practices. In fact, say Ecotricity, Good Energy has lied. You see beyond simply supplying renewable energy to customers who want it, Good Energy has publicly committed to 'retiring' 5% of its Renewables Obligations Certificates (ROCs - a type of tradeable 'credit' for supplying clean energy) - above and beyond the amount required by law. That way, the theory goes, Good Energy is raising the value of ROCs and encouraging further investment in renewables. Ecotricity have compiled a list of public statements from Good Energy proclaiming their 5% retirement policy. Good Energy, on the other hand, claim that the 5% claims were always about ROC value, not percentage of ROCs:

We originally set ourselves a target of retiring ROCs to the equivalent economic value of 5% above our compliance levels. Doing this at £50 per ROC rather than £37.19 means we retire fewer than an actual additional 5%, but to an equivalent economic value.

So far, so confusing - but as a former Good Energy (and, later, Ecotricity) customer, I must admit I was always under the impression that Good Energy were retiring 5% of their ROCs above the amount required by law. (I should state that I am far from a lawyer - as are most customers - and I may well have misunderstood materials sent to me.)

But it doesn't end there - whether or not Good Energy's claims rested on 5% ROCs, or the economic equivalent of 5% (a distinction that is pretty hard for us lay-people to understand), Dale Vince claims that Good Energy's numbers still don't stack up:

You have to ask why not just say ‘we retire 3% ROCs’ why try to big this up as 5% (while meaning ‘financially equivalent to 5% at buyout value only’ without saying so). That’s not a very transparent way to operate. I think this is also a fact. But the big question is this - Is ROC claim number two ‘real’? Did Good Energy retire ROCs all this time on that other ‘unspoken’ basis? We crunched the new numbers… Drum roll time again… No they did not! This is also a fact.

To back up his claims, Vince and the Ecotricity team have put together a table showing Good Energy's ROC retirements between 2003 and 2009 and, assuming their numbers are correct, Good Energy only retired ROCs matching their claims in 2003/2004 - with the amount of retirements above their legal obligations decreasing down to 0 between 2007 and 2009.

Clearly a system that needs this much explanation is hard for your average customer (i.e. me!) to comprehend. Yet I'd hate to jump to conclusions - I am no expert, and I'd love to hear why Good Energy have not retired anything above their legal obligations in the last two years, or indeed if Ecotricity's claims are false. (I see nothing in their public explanation of ROC retirement.)

But ultimately the lesson here is that accountability requires transparency - and transparency requires comprehension. If it takes an expert to understand a company's marketing claims, then those claims need to be unpacked. I for one am mighty glad that this debate is being had in the open by the main players in the market - and not being dragged out into public by the tabloid press.

Tags: Alternative Energy | Economics | United Kingdom | Wind Power

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