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Good, Green Energy – What are My Options

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There are three main options. First, green tariffs which are offered by suppliers at a premium. In most cases, they are simply a standard tariff with the addition of unbundled RECs. It’s important to note that a renewable generator doesn’t have to sell their energy and REC to the same supplier. It could be the case, therefore, that a supplier marketing a ‘green tariff’ has simply purchased cheap RECs from a hydro plant and isn’t directly adding any new renewable energy assets to the grid itself. You might want to check if the supplier are actively involved in building new renewable energy assets or not.

We believe the best REC is one that details its source (e.g. wind, solar, etc.), the age of the generator, and its geographical location. If you simply want to tick the green box, then any REC will do. It comes down to what impact you want to make. You may consider how savvy and demanding your stakeholders are or the talent you want to attract, or what reporting frameworks you wish to adhere to (e.g. CDP, Science Based Targets, BCorp, RE100, etc). Doing nothing is no longer an option, but where you sit on the spectrum from ‘bare minimum’ to ‘over and above’ is up to you.

Because of their abundant supply, RECs can be so cheap as to not have any real financial impact on the projects they came from. Hence, buyers of unbundled RECs and most green tariffs cannot claim their purchase enabled a new project to be built (additionality). Green tariffs from suppliers whose model is based around building new renewable energy assets (e.g. Ecotricity or Good Energy) represent a deeper shade of green than tariffs from suppliers that also have coal and gas assets. To truly claim additionality, one must look at a Power Purchase Agreement (PPA).

Summary

Your renewable energy journey is one of increasing engagement and impact, but it doesn’t need to be complicated. Our clever simple solutions and consultative approach means a clear, staged energy strategy that contributes to a broader sustainability agenda. We’ll help you to navigate the shades of green and pick the optimal solution for your business, transforming your greatest energy challenges into your competitive advantage.


Alfa Energy Group

An international energy and sustainability consultancy that develops relevant strategies for clients in all industries and keeps them running.