Thinking about a renewable energy plan?

If you work for a SME or charity and are looking for a more sustainable energy supply, what are the options and will it cost more?

I looked at several energy companies to see what renewable tariffs they offered, compared the prices and how green their actual offering was.  I took a hypothetical office of around 2,000 sq feet and using average consumption figures assumed usage figures of 13,000 kWh per year for electricity and 17,000 kWh for gas.

To keep things simple I just looked at one year fixed price dual fuel contracts.  All prices exclude VAT, and any other charges that might apply.

Starting with British Gas, all their standard business electricity is advertised as 100% renewable or zero carbon.  It is backed by Renewable Energy Guarantees of Origin (REGOs) which is a guarantee that an equivalent amount of electricity is generated through renewable sources.  However it doesn’t guarantee that the supplier is actually buying all the electricity from renewable generators (see my article HERE for a full explanation of renewable electricity tariffs).

All energy suppliers have to give a fuel mix disclosure which shows the sources their electricity actually comes from and the CO2 emissions.  British Gas are buying electricity from a mix of renewables and fossil fuels and this leads to emissions of 88g of CO2 per kWh.  The REGO scheme effectively offsets this and allows them to claim the electricity is 100% renewable.

For small gas users the standard gas tariff is sold as carbon neutral, with 10% coming from renewable sources and 90% backed by offsets.  Very large users (over 150MWh per year) have other options.  (For more information about renewable gas see my article HERE)

The basic annual price for electricity worked out at £3,280, and gas at £1,470, giving a total of £4,750.

Next I looked at Utilita.  They are upfront about not having renewable tariffs, but say their focus is on helping customers improve energy efficiency and reduce waste.  Having said this it’s not clear what they are doing that other suppliers aren’t.  Most suppliers offer active energy monitoring systems and talk about helping users to improve their energy efficiency.

Utilita make the point that the electricity we use comes from the same sources whatever the tariff, which is superficially true.  However their fuel mix disclosure shows they buy over 80% of their electricity from fossil fuel generators and emit 388 of CO2 per kWh.  A consumer of this electricity can’t claim Net Zero, and Utilita isn’t supporting renewable generation to the degree that British Gas is.

The annual price for electricity worked out at £3,200, and gas was £1140, giving a total of £4,340.  This is cheaper than British Gas, but only by about £400 per year, just under 10%.

Finally I looked at Octopus Energy.  They actually buy all their electricity from renewable sources and don’t just buy REGOs or offset in order to claim a renewable tariff.  They also emphasise their investment in renewable generation, therefore working to improve the long term situation.  Their electricity is genuinely 100% from renewable sources, with a fuel mix disclosure showing 0g of CO2 per kWh.   

Their standard tariff comes out at £4,560 per year for electricity.  This is because their standing charge is significantly higher than most others.  However they do have a zero standing charge tariff with a slightly higher unit cost which works out at £3,410 per year.  For smaller users the standing charge plays a more significant part in the total bill.  A zero standing charge tariff may also provide a smaller user with an extra incentive to try to reduce their use as much as possible.

The gas works out at £1,030 per year, giving a total of £5,590, or £4,440 for the zero standing charge tariff.

Obviously this is just a sample of three suppliers and the results will depend on individual usage.  However there appears to be little extra cost in going for a tariff that is certified as renewable, and one where the electricity genuinely comes from renewable sources might not be much more expensive.

Most energy suppliers are offering renewable options, and assuming you have some flexibility over the price the question is how to decide which one to chose.

All suppliers are required to publish a fuel mix disclosure which shows the sources of the electricity they sell.  From a purely PR point of view, a tariff backed by REGOs or offsetting will allow you to say the electricity is Net Zero or 100% renewable.  However this could be seen as greenwashing.  If you want to support genuinely renewable electricity, looking at the fuel mix disclosure will let you see where the supplier is actually getting it from.