UK Wind Energy Companies in Open Conflict
Image credit: Good EnergyEcotricity Accuses Rival of DishonestyThere's long been disagreement in the UK about how best to stimulate the renewables marketplace. But those disagreements seem to be spilling out into open hostility. Ecotricity, pioneers of high profile urban wind projects are accusing their competitor, Good Energy, of peddling misleading marketing claims. Read on for all the dirty details. It's no secret that Ecotricity favors a different approach to selling renewables compared to most of their competitors. Suppliers like Good Energy - whose CEO Juliet Davenport has been an outspoken advocate for green energy - have followed the model of supplying energy purchased from 100% renewable suppliers, claiming that this drives investment in renewables. They've also pledged to 'retire' a certeain number of green energy credits (Renewable Obligation Certificates, or ROCs) to help drive up the value of green energy in the marketplace.
Meanwhile Ecotricity, on the other hand, do not necessarily buy all energy from renewable sources - instead pledging to channel their profits back into building new turbines. In my interview with Ecotricity CEO Dale Vince, he argued that 100% tarriffs from companies like Good Energy were marketing led and not entirely honest:
Many companies have set up to sell green energy and they do so on the premise that by buying it consumers can reduce their carbon emissions - its marketing led and not fully honest. What's been happening is that companies have been buying up sources of green energy to bundle into 100% tariffs, in the process taking that green power from the current user to sell it to a new one. Before liberalisation we all had about 3% renewables in our fuel mix (in the UK) - following liberalisation and the rash of 100% tariffs - we now all typically have 0% in our fuel mix and a few people have 100%. So its a redistribution of green and of carbon.
But this disagreement over 'old' versus 'new' green energy is only half the battle - now Ecotricity have gone a step further and accused Good Energy of not retiring as many ROCs as they claim. Here's more from Business Green on the mounting controversy over green tariffs:
However, according to official figures from energy regulator Ofgem, there is a significant discrepancy between the quantity of ROCs the company has on occasions claimed to retire and the number that have actually been handed over. A dossier prepared by Ecotricity and seen by BusinessGreen.com provides evidence of past marketing material from Good Energy, in which it appears to state that it retires a straightforward five per cent of ROCs above the required annual obligation in any one year.
One Good Energy customer who wrote to the company in October 2008 seeking clarification on its ROC retiral policy received a reply stating: "Good Energy goes above and beyond the percentage required by the government (8.9 per cent in 2008), by retiring an extra five per cent of ROCs (ie, 13.9 per cent in 2008)."
Ecotricity's complaint centres on this five per cent figure. Good Energy defends the figure, while Ecotricity has argued it is an exaggerated claim that distorts competition between the two firms.
Figures from Ofgem show that for the year 2007-08, Good Energy supplied 114,199MWh of electricity, but is yet to retire any ROCs in addition to those submitted to meet its legal obligations – although a spokeswoman for Ofgem said the company has until 31 August 2009 to retire additional ROCs for that period. Ofgem figures also show that in the 2006-07 period, Good Energy retired 2,124 ROCs beyond its obligations – equal to just over two per cent of the 10,4171MWh of electricity the company supplied.
Whatever the truth of the matter is, here's hoping that it can be straightened out, and fast. The last thing the emerging green energy market needs is public skepticism about suppliers' credentials. Green energy companies have an obligation to be transparent and clear about what they mean when they say "green energy", and then they have a responsibility to meet those claims. Anything less risks jeopardizing the entire market.