4 key questions you must ask your broker about your green energy supply
Today’s customers are becoming increasingly conscious of climate change initiatives, often choosing who to buy from based on an organisation’s position on climate change and sustainability.
Here at the Co-op we have bought green energy for over 15-years. This promise to our members helps us support our commitment to becoming carbon neutral by 2040; sooner than many other organisation’s targets of 2050.
Depending on your organisations’ position on sustainability and if your customers have a preference where they buy from, you may wish to present your climate change credentials to your customers starting with buying 100% green energy.
Let’s start with a quick overview of what Renewable Energy actually is:
“Renewable energy is energy derived from natural sources that are replenished at a higher rate than they are consumed”
Sun and wind are examples of energy being constantly being replenished with these sources creating far lower emissions than burning fossil fuels such as coal and gas.
Solar energy delivers heat, cooling and lighting, by converting sunlight into electrical energy through photovoltaic panels or mirrors that concentrate solar radiation.
Wind energy harnesses the kinetic energy of moving air by using large wind turbines located on land (onshore), sea or freshwater (offshore).
Whilst wind speeds may vary by location, the world’s technical potential for wind energy exceeds global electricity production, with ample potential existing in many of the world’s regions.
And is BIOENERGY renewable?
Bioenergy is produced from a variety of organic materials, called biomass. Wood, charcoal, dung and other manures are burnt for heat and power production along with agricultural crops for liquid biofuels.
Modern biomass systems include dedicated crops or trees, residues from agriculture and forestry, and various organic waste streams, often popularised in rural regions in developing countries for cooking, lighting and heating.
Energy created by burning biomass creates greenhouse gas emissions, but at lower levels than burning fossil fuels such as coal, oil and gas. However, given its potential negative environmental impacts, bioenergy should only be used in limited applications.
Now we’re clear what renewable energy is, here’s 4 key questions to ask your power supplier:
1. How much of your electricity is from renewable sources?
Knowing how much of your supplier’s electricity comes from renewable sources gives an indication of their commitment to green energy.
Three key issues to check:
(a) Check the terms of your power product. If you prefer to support renewable energy with 100% green electricity, some suppliers require you to select renewable power via a certain product or contract
(Suppliers may promote renewable power in their advertising, but still sell you a majority non-renewable contract if you haven’t specified what you want).
(b) Check your supplier’s Fuel Mix Disclosure (FMD). All suppliers are required to disclose the mix of fuels used to generate the electricity they supply. If a supplier is buying large quantities of non-renewable power and therefore supporting fossil fuels, this must be disclosed on the FMD.
(c) Check your supplier has independent accreditations: Accreditations will verify your suppliers renewable power products and can be awarded by 3rd parties who audit renewable products against international standards: e.g. Greenhouse Gas (GHG) Protocol.
NB: Suppliers might be buying the right amount of renewable power to cover your product, however their FMD might reflect that the supplier is also providing ‘conventional’ power to other customers, thus not having a 100% renewable FMD.
“This authentication of origin of the renewable energy, enables energy suppliers to prove the level of renewable electricity in their fuel mix”.
2. Are you able to provide REGO certificates confirming the source?
Renewable Energy Guarantee of Origin (REGO) certificates provide a guarantee to the consumer that the power you buy is genuinely green and renewable.
How do REGOs work? For every megawatt hour (MWh) of eligible renewable generated, Ofgem (the Office of Gas and Electricity Markets who regulate U.K. suppliers will issue a REGO certificate. This certificate is issued to the end user authenticating that renewable sources produced that portion of energy.
At the end of the financial year, REGOs are listed in the Ofgem Renewable and CHP Register allocated to the supplier who held them at that point. This authentication of origin of the renewable energy, enables energy suppliers to prove the level of renewable electricity in their fuel mix.
Not only does each REGO evidence what has been generated, sold and consumed, it becomes a record to you the buyer, the government and the EU to determine what has been generated to meet renewable energy targets in a clear and transparent way. For you the end user, it gives confidence and business assurance evidence of your renewable energy and environmental credentials.
When one REGO is issued per megawatt hour, you may want to ask your broker or supplier to administer the complexity rather than manage in-house.
Benefits for your business
Zero carbon emissions reportable within your power supply – if your power is 100% renewable (more on that below), then your business can report zero carbon emissions under Scope 2 related to its purchased electricity.
Clearly demonstrate your sustainability efforts to customers – with the Ofgem register being freely available, the public can see the listing of the supplier you purchased them from. Whilst they won’t have your organisation’s name listed explicitly, these can then be traced back to your business.
By taking advantage of purchasing a REGO-backed supply, it increases your environmental credentials whilst providing you peace of mind that your energy is being sourced from renewable sources. This is one of the cheaper ways you can further your carbon reduction initiatives and doesn’t require you to change your business operations or infrastructure.
“It takes time, effort and money to build brand reputation and days to diminish it.”
3. Are you involved in greenwashing?
Phrases such as ‘sustainable’, ‘carbon-net zero’, ‘carbon off-setting’ and ‘environmentally-friendly’ are becoming increasingly more prominent on packaging and advertising. Brands promoting their impact on climate change are often criticised if the claim can’t be substantiated. This not only tarnishes their brand, but also the credibility of the renewable energy sector.
It takes time, effort and money to build brand reputation and days to diminish it.
The REGO and GoO schemes were implemented to increase accountability for renewable electricity generation. Having the ability to track where electricity comes from, enables customers to make more informed decisions based on their business needs.
According to Which, the average fuel mix for all UK suppliers is just 40% renewable (Apr 2020-March 2021).
[Differences between green energy suppliers - Which?]
So make sure your supplier is genuine when it comes to their green energy credentials.
“…make sure you receive your Renewable Gas Guarantee of Origin (RGGO) certificates, as proof of origin.”
4. Can you supply Renewable Green Gas?
Until a few years ago, there was no green gas generated in the U.K. so we’re still in the evolutionary stage of supply, plus it’s a challenge to guarantee the gas you receive is ‘green’ gas as its supplied using the same supply network as natural gas.
Renewable natural gas (RNG), also known as sustainable natural gas (SNG) or biomethane, is a biogas sourced from food and farm waste and broken down in tanks using a process called anaerobic digestion. Its upgraded to a quality like fossil natural gas, with a methane concentration of +90%.
By increasing the concentration of methane to a similar level as natural gas, it becomes possible to distribute the gas to customers via the existing gas grid and use in existing appliances.
So whilst the majority of gas is if you prefer to buy Green Renewable Gas, make sure you receive your Renewable Gas Guarantee of Origin (RGGO) certificates, as proof of origin.