Alistair Buchanan,
Chief Executive,
Ofgem
 
London, U.K. --- (METERING.COM) --- November 22, 2007 - U.K. energy regulator Ofgem has proposed new ratings for “green” tariffs to enable customers to more easily choose between the various offerings in the market.

A key element of the proposals is to develop separate guidelines for renewable and low carbon tariffs that will apply to both domestic and business customers. Consultation indicated that to some “green” refers only to renewables, while others think low carbon is more important and that other technologies such as nuclear should be included.

Ofgem proposes that there should be a “quality mark” associated with renewable tariffs to give consumers confidence that their energy supply is being met from verified renewable sources. For low carbon, a carbon intensity banding scheme is proposed, similar to an existing A-F banding (A=0, F=very high) energy efficiency rating for electrical appliances.

Ofgem believes that to cut the confusion and to enable more informed choice, greater and more standard information transparency is needed. For renewable tariffs, the proposed tariff specific information includes compliance with the guidelines and the percentage of renewable generation included with the renewable tariff fuel mix, as well as the renewable generation content included within other tariffs from the supplier. For low carbon tariffs, the proposed information includes the fuel mix of the tariff and the banding based on the carbon intensity of the tariff, as well as the same information for other tariffs from the supplier.

Suppliers already have a legal obligation to supply a percentage of energy from renewable sources and this percentage increases every year. This means that every energy customer is already making a contribution to promoting renewables and lowering carbon emissions. Ofgem’s aim is to ensure that customers who buy green tariffs know if they are paying for the amount of renewable energy suppliers are already legally required to supply, or whether they are funding additional green supplies.

The revised guidelines are expected to be published early next year. Industry will then have six months to develop a certification scheme based on the guidelines, so that the scheme should be up and running by mid-2008.

Commenting on the proposals, Ofgem chief executive Alistair Buchanan said: “Currently, customers find it difficult to compare the environmental benefits of the various energy deals on offer. 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.”