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New green ratings for utilities

21/11/2007

New guidelines are being proposed that would see energy tariffs given a green rating based on how much carbon they use.

Energy regulator Ofgem says the proposals would work in a similar way to the A to F energy efficiency rating displayed on household appliances.

Under the plans tariffs would be rated on the percentage of energy generated from renewable sources.

In addition, energy schemes designated as 'low carbon' by utility firms would have to provide more information on just how low the carbon emissions involved are.

"By cutting green confusion we are giving consumers more confidence when shopping around for an electricity deal to help cut their carbon footprint," said Ofgem chief executive Alistair Buchanan.

"Currently, customers find it difficult to compare the environmental benefits of the various energy deals on offer," he continued.

"The new rating scheme will eliminate confusion and encourage customers to seek deals that best meet their needs, and will give suppliers more incentives to innovate and develop new tariffs and products."

Ofgem expects the certification system to be up and running by the summer of next year.

But the proposals have been given a lukewarm reaction by consumer groups. The National Consumer Council (NCC) and energy watchdog energywatch said the scheme would not end the confusion over the term 'low carbon' itself.

Cassie Higgs, senior policy advocate at the NCC, explained: "Our recent investigation into green energy tariffs showed that it's too easy for consumers to be confused and misled.

"We called for new guidelines and independent accreditation of green energy claims, to make suppliers come clean about how 'green' their energy really is.

"Ofgem has accepted the need for such guidelines, which is welcome. But many consumers could still be confused if the information isn't easily understood."

Jonathan Stearn, head of campaigns at energywatch, added: "Our recent research shows that the public are confused about which methods of generating energy are low carbon. While the vast majority correctly identify renewables as a low carbon method, only one-third correctly identify nuclear power.

"That's why it's vital that Ofgem addresses this point. The final guidelines must introduce more clarity, not more confusion, for consumers."