Weekend press round-up: How green are ‘green’ energy tariffs?

In our latest review of sector coverage across the national newspapers, there is further debate about the concept of greenwashing. Meanwhile, the public has been warned that radiators will have to run 10 degrees cooler under changes to homes needed for Britain to hit net zero.

How green is your ‘green’ energy tariff?

It’s time to switch to a renewable energy tariff. This is the well-meaning advice given to eco-conscious households across the country that are eager to play their part in reducing greenhouse gas emissions.

About 40% of the UK’s CO2 emissions are created in the home, so opting for a low-carbon source of electricity could be one of the simplest ways to help the UK move towards a carbon neutral future by 2050. But how “green” are our green energy tariffs?

As the public interest in renewable electricity tariffs has increased, so too have the number of clean energy deals on the market. There are dozens of energy deals that supply 100% renewable energy to about 9m homes across the country – but many are not as green as they seem.

There are three ways an energy supplier can offer a renewable energy tariff even if they do not own any renewable projects. A supplier might pledge to use 100% of the income from their customers to invest in developing renewable energy, or strike a deal directly with an existing windfarm or solar array to buy the electricity they produce.

It is the third option that has sparked accusations of “greenwashing” against some of the biggest energy suppliers in the market for offering renewable energy deals backed by certificates that appear to prove the origin of clean energy, but may only be green on paper.

When a supplier claims that their 100% renewable energy tariff is backed by a renewable energy guarantee of origin certificates, or Regos, it means it will match each megawatt of electricity its customers use with certificates representing the same amount of renewable energy. Major suppliers including British Gas, Ovo Energy and Bulb use Regos to back up their 100% renewable energy tariffs while buying a small proportion of their energy directly from green projects.

It is a strategy that appears to make sense – but there are loopholes that risk “double counting” the UK’s renewable energy use or even claiming foreign renewables as its own.

If, for example, a big corporation with a clean energy target strikes a deal directly with a solar farm to buy its electricity, the company will receive certificates for every megawatt generated. Later, it could choose to sell these certificates – separate from the electricity they represent – while using the contract with the solar farm as proof that it has reached its clean energy target.

This allows suppliers to snap up certificates as “proof” that the electricity they supply households comes from a renewable energy source. However, it may have already been promised to an energy-hungry corporate data server or office tower elsewhere in the UK.

Energy suppliers could use a combination of these green energy options to back up their 100% renewable energy tariffs, making it even more confusing for households.

In recent weeks, Uswitch became the first comparison site to set standards for green tariffs – gold, silver or bronze – depending on whether the supplier generates its own renewable electricity or how it sources its electricity, to help separate the true green from “pale green” tariffs.

The safe bet is to choose a gold standard deal. The four deals that make the grade are all from Good Energy, which sources clean electricity directly from 1,600 renewable energy projects across the UK, and runs its own solar and windfarms too.

Juliet Davenport, the founder and chief executive of Good Energy, is a vocal critic of so-called “greenwash” tariffs that claim to offer clean electricity on paper but do little to support renewable energy projects by buying their power supplies directly from wind and solar farms.

“For years now energy suppliers have been able to mislead customers who are trying to do the right thing in choosing green. The UK cannot achieve net zero without bringing everyone along, and being dishonest with the very people trying to help is not the way to go about that,” Davenport said.

An ongoing government consultation plans to make suppliers come clean on their green energy. Until then, look out for 100% renewable energy deals from suppliers that source only a small proportion of the electricity they supply directly from renewable energy projects.

The Guardian

Home radiators will have to be 10 degrees cooler for Britain to reach climate targets

Radiators would have to run 10 degrees cooler under changes to homes needed for Britain to hit net zero, the public has been warned.

The Government has said it wants 600,000 heat pumps replacing gas boilers every year by 2028 to help decarbonise the country’s home heating, which accounts for 10 per cent of the UK’s greenhouse gas emissions.

But MPs and experts have warned that without a massive programme to address the UK’s draughty homes and scale up engineering skills, people could be left in the cold by the technology, which works by drawing in heat from the air or ground outside.

While gas boiler heating systems can pump 60C water into a home’s radiators, the Climate Change Committee, which advises the Government, assumes heat pumps will operate at 50C.

To keep homes warm, that may require bigger radiators, underfloor heating and improved insulation, with full modifications estimated to cost on average £18,000.

Homeowners will currently have to cover the costs themselves as the government scrapped its grants scheme after just six months.

Heat pumps can reach high temperatures, but become inefficient and expensive to run, though a regular hot cycle is necessary to kill legionella, which can lead to Legionnaires Disease.

Darren Jones MP, the chair of the Commons business and energy committee, said: “It’s not the same as gas. You can’t just knock up the dial on your wall a little bit and suddenly it gets a bit warmer”.

The UK is nearly halfway to meeting its target of reaching net zero emissions by 2050, but the transition has so far been achieved largely by phasing out coal-fired power plants and boosting the offshore wind industry.

The next phase will require individuals to make much more personal changes to the way they travel, heat their homes and what they consume. That carries risks if people are turned off by the transition.

The Department of Business, Energy and Industrial Strategy (BEIS) established a behaviour change unit last year to tackle how the Government will persuade people to make the necessary transition.

Home heating is considered one of the biggest hurdles, because of the level of investment and intrusion required to change it.

“It is a problem to persuade people that they can’t necessarily rely on a system which will transform the warmth of the room that they’re in, in a matter of minutes,” said Philip Dunne MP, chair of the environment committee.

“And that does require education. And it’s difficult to do with people who are not committed to the environmental cause. They’re just concerned that they’re cold.”

The rest of this article can be read here (subscription required)

Daily Telegraph

Zenobe Energy ready to press the button on huge northwest battery project

A start-up backed by M&G, the fund manager, is preparing to build one of Europe’s biggest battery storage projects near Chester.

Zenobe Energy, chaired by Steve Holliday, a former National Grid boss, plans to begin construction of the 100-megawatt battery at Capenhurst on The Wirral by June.

The project will cost tens of millions of pounds and should be completed by April 2022, when it will be capable of supplying enough electricity to meet the needs of more than 100,000 homes for an hour at peak demand.

Zenobe said that the battery would help National Grid to deal with increased volatility in the frequency and voltage of the network caused by the shift to renewable energy.

James Basden, its co-founder, said: “As more coal and gas power stations come off the network and we replace that power with solar and wind, it gets harder to manage the electricity power grids. It gets very hard to keep the voltage at the right level.”

The company has secured a £3 million contract from National Grid to use the battery to help to address that issue and to keep the voltage of the transmission network in the Mersey area at safe levels. It also plans to make money by using the battery to offer National Grid services to help to balance the frequency of the network nationwide.

Zenobe said that its project would be the biggest single battery connected to the grid in Europe. However, other 100MW projects exist that comprise two co-located 50MW units, such as the Minety project in Wiltshire, which is due to be extended to 150MW with the addition of a third unit this year. Intergen is planning to build a larger, 320MW battery in Essex, although it is not expected to be operating until 2024.

Planning to join the party

SSE is drawing up plans to build more than 500 megawatts of battery storage projects around Britain (Emily Gosden writes).

The FTSE 100 energy group already operates pumped hydroelectric storage sites, but now it is planning its first foray into battery storage, complementing its expansion in wind power by providing back-up power when the wind doesn’t blow.

Speaking on an industry panel recently, Alistair Phillips-Davies, chief executive of the FTSE 100 energy group, disclosed that it was preparing to present plans to its board for “in excess of 500 megawatts of batteries that we’re looking at, that we’ve got sites for currently across the UK”. That would be enough to power about 500,000 homes when discharging power at maximum output, which batteries typically have enough capacity to sustain for about an hour.

It is understood that the plans are still at an early stage and that the projects could be built over the next decade.

Phillips-Davies said that such investments were “a very important part of making sure that the grid is safe and secure”. He said that SSE was already “the largest storage operator in the UK” thanks to its reservoir-based energy storage facilities in Scotland. It is seeking to build another pumped storage facility at Coire Glas in the Highlands.

The Times

New homes trap owners in high-cost energy deals

Thousands of homeowners are locked into expensive heating contracts with no option to change providers because of an unregulated government green-energy initiative.

People whose homes have communal heat networks are being charged up to four times their previous energy bills because their development has one communal heat source, usually a biomass boiler or heat pump.

The tariff is set by developers or managing agents and energy providers and, in some cases, is locked for ten years. There are more than 14,000 heat networks providing warmth and hot water to nearly half a million consumers. In London, all new large developments must be attached to a heat network, and by 2025, all new homes nationwide must be powered by low-carbon systems. The rules aim to help to hit the government’s 2050 target for net zero emissions.

Last year Kwasi Kwarteng, who was minister of state at the Department for Business, Energy and Industrial Strategy, said that they were “playing a vital role in decarbonising the way we warm our homes and businesses”, with funding available from two sources.

Industry experts, campaigners and residents are now calling for ministers to regulate the industry to ensure fair pricing for all consumers. Residents’ costs are split into a charge per kilowatt-hour (kWh), for the energy used, and a standing charge. In some cases the standing charge is £1 a day, meaning residents are facing bills of at least £30 a month before they have switched on their heating. Suppliers say that the standing charge reflects the cost of maintaining the systems and that it is cheaper than running a gas boiler, but a comparison of prices suggests that this is not always the case.

There are caps on how much energy companies can charge the wider public for electricity and gas. Campaigners want a cap for the cost of heat for communal heat networks.

This is the latest problem to hit leasehold owners of flats, many of whom are also facing big bills to replace flammable cladding. Many must also pay higher insurance premiums to cover “waking watch” fire wardens to patrol their buildings 24 hours a day. These charges, and delays in getting certificates to sign off buildings as safe, have left many struggling to sell their flats or needing to borrow money to pay for repairs.

An investigation into the Phoenix Works development in Tower Hamlets, east London, by Fuel Poverty Action found that residents were paying 13.77p per kWh for heat, which for the average two-bedroom flat would cost £822 a year, although some residents were paying more than £1,200. The average annual cost of gas for a three or four-bedroom house is £572.

Fuel Poverty Action is urging the managing agent, KFH, the developer, Fairview Homes, and the energy provider, Ista Energy, to reduce the costs to make the heating cheaper.

The rest of this article can be read here (subscription required)

The Times

Don’t let oil and gas workers ‘wither on the vine’, ministers urged

Ministers are being urged not to let workers in the oil and gas sector “wither on the vine” amid concerns about the extent of new jobs in greener energy that they can benefit from within the decade.

The North Sea is past its heyday as a producing basin and is also under pressure from efforts to slash carbon emissions – in a challenge to Scotland’s case for independence with the help of tax revenues from the basin.

It is predicted the 151,000 people employed directly or indirectly in the sector in 2019 could fall to 105,000 by 2030 due to falls in production, according to projections from the trade body Oil and Gas UK (OGUK).

Meanwhile, plans for the industry to develop hydrogen, carbon capture and other greener technologies could create about 40,000 jobs for the sector in the same time frame, OGUK and Government predicts, suggesting a potential shortfall of several thousand jobs.

The 40,000 figure is a key part of a new “transition deal” between the North Sea industry and Government to help the industry adapt towards a lower carbon future, which relies heavily on industry investing billions of pounds into new technologies.

Victor Fraser, regional officer for the Unite union based in Aberdeen, said: “The deal is welcome, there is no question about that. But we would not like to think that existing oil and gas workers are not just left to wither on the vine.

“A lot of the people made redundant last year [during the pandemic] may never come back to the industry: there is less requirement for them.”

One industry source said: “We are all for the transition – we just don’t want to go down a route where jobs get plundered and investment falls.

“There’s an assumption that workers in the sector will just be redeployed but it doesn’t necessarily work like that – there are different skills, different locations.”

Daily Telegraph

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.