DEFRA is setting up systems which aim to give consumers and businesses information on what benefits their green energy tariffs actually deliver over and above the supplier’s existing legal obligation to supply electricity from renewable sources.

The measures are:-

§          asking OFGEM to provide detailed guidelines for suppliers to create a rating system of the different environmental potential of green tariffs;

§          a letter to chief executives of energy suppliers requiring better information on environmental benefits;

§          plans to change DEFRA guidance on corporate reporting to reflect recent evidence.

“I want to be sure that people and businesses who buy green tariffs have clear information about what environmental benefits they are getting linked to renewable electricity and whether this is in addition to that which energy suppliers must provide anyway,” said environment secretary Hilary Benn. “As with any product in the marketplace, we need to know what we are paying for, particularly as in some cases, choosing the tariff may cost more.”

He said companies have signed up to green tariffs but new evidence suggests this has produced only limited renewable generation capacity. The voluntary corporate reporting guidelines will be brought into line with current best practice on carbon reporting and, for 2008-9, best practice will involve using a grid average rate unless suppliers can prove carbon benefits are additional. Further thought will be given to how broader environmental benefits should be treated.

The Carbon Trust backed the move with specific guidance for business on green tariffs.

“We strongly support the move made by DEFRA today as the green tariffs market currently lacks transparency, delivers minimal additional carbon savings and suffers from significant double counting problems,” said the Trust’s chief executive Tom Delay. “Renewable power is key to delivering the UK’s carbon reduction targets. However, a coordinated approach is required to ensure that green tariffs deliver genuine carbon reductions and that the benefits of renewables can be accurately reported by businesses towards their carbon reduction targets.”

http://www.defra.gov.uk/news/2008/080616a.htm