Energy News

Ofgem’s green energy labels will ‘do more harm than good’

Tuesday, 9 February 2010

By Hazel Cottrell - hazel@consumerchoices.co.uk

A new green energy label, designed to help Brits identify ‘genuine’ green energy tariffs, will cause more confusion according to critics.

A new ‘green energy’ label, which aims to show customers which energy tariffs have genuine environmental benefits, has been unveiled by regulator Ofgem.

The “green energy certified” label will be awarded to energy suppliers who can prove that their green tariff results in a reduction of CO2 emissions above a minimum threshold. This must be in addition to meeting existing government targets for reducing emissions.

Critics have claimed, however, that the new labelling system could do more harm than good.

“Consumers were confused about green energy before, and these labels will just cause more confusion,” claimed green energy supplier Ecotricity.

Dale Vince, founder and MD of Ecotricity said: “Ofgem’s new ‘rules’ set an artificial standard of what green electricity really is. Consumers will get poorer, but Britain won’t get any greener as a result.”

Under the new rules, energy suppliers will not be obliged to invest in new sources of green energy, but instead can call their tariffs “green” by adding-on schemes such as carbon offsetting or energy efficiency schemes.

Ecotricity said customers will be charged around £25 a year for these “certified” green energy tariffs, but some will have as much real environmental benefit as putting in an energy-saving lightbulb costing £1.50.

So far the scheme has seven participants: British Gas, E.ON, EDF, Npower, Scottish and Southern Energy, Scottish Power and Good Energy. Ofgem said it hopes additional energy suppliers will sign up to the scheme in the future.