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Business customers urged to choose green power carefully

SOME UK POWER COMPANIES are charging business companies extra for green energy they’ve bought to meet new government rules, according to research by energy information service Platts, and environmental campaign group Friends of the Earth.

The research warns businesses who want to green their power supply to choose carefully to make sure that extra payments they make for renewable power do not subsidise the power company in meeting its legal obligations.

‘Business customers need to ask why they are buying green.

If their main goal is to save money by gaining exemption from the climate change levy, there are plenty of levy exempt products to choose from,’ says Paul Whitehead, editor of European Utility Retail. ‘But if they are prepared to pay extra for the environmental benefits of green energy, they need to choose carefully.

‘Too many of the suppliers we surveyed charge a premium for their green energy that they would have to generate or buy in any case to meet their obligations,’ he added.

The introduction of the Renewables Obligation in the UK was part of the UK government’s commitment to cut greenhouse gas emissions.

It requires all suppliers to source 3%, rising to 10% in 2012, of their power from renewable sources including wind, solar, biofuels and small hydro. It excludes established large hydro plants.

Those with insufficient green generation of their own can buy renewable obligation certificates from those with surplus green energy.

However, the research carried out found that only one green tariff offered to business customers on the UK mainland created additional demand for green energy above the 3% requirement.

Other suppliers have increased their conventional power prices, the researchers claimed, to accommodate the renewables obligation but still charge a premium to customers who want 100% green power, using those sales to help meet their 3% quota.