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Friday, 26 August 2022

Even the “Greens” are capitalists!

I am a supporter of the “green lobby” – that is, anything to do with helping to mitigate the effects of climate change. But sometimes the things you do just seem to come back and slap you in the face, and a case in point is green energy.

Green Energy

Many years ago my family decided to move to a green energy supplier because although we knew it would cost us more, we felt it was for a good cause as the “premium” we paid helped investment in green energy.

Now switching to a green energy provider is not as simple as you may think because there are, unfortunately, shades of green! And here they are (in very simple form, for electricity only as gas is more complex):
  1. 100% green energy supplied from a company’s own resources, e.g. wind farms and solar. There are no energy companies in the UK in this category.
  2. 100% green energy supplied from a mix company’s own resources and energy it purchases directly from other green energy generators. There are only a handful of such companies in the UK – we use one of them, Good Energy – because at the time we switched there were actually only two contenders (ECotricity being the other).
  3. 100% green energy supplied from a mix company’s own resources and renewable energy certificates (RECs) it purchases. 
Here’s the rub – a number of companies in category (3) claim to be green, but in fact the purchase of RECs is not a green activity as it means the energy that was generated by the green company who provided the RECs was not necessarily purchased by the utility company. It’s a loophole that is being looked into, but in the meantime many utility companies are misleading the public by saying they are green when in fact all they are doing is buying certificates, and not the actual energy! [Ref 1] This activity is known as greenwashing (and there are other activities that also fall into this category, beyond the scope of my piece here – but here’s a good case study on Shell [Ref 2]).

Green capitalism

So anyway, we were perfectly happy with Good Energy for many years. When they recently sold off all of their own energy generators we were a bit unhappy, but they remained 100% green in that they still directly purchased the energy [Ref 3].

And then came the recent energy crisis. For whatever reason (and it isn’t all due to Russia’s illegal war against Ukraine) gas and electricity prices have soared in recent months, and look set to continue to increase at previously unheard-of rates. Everyone is being impacted by this, as the news shows. [Update: prices have come down agauin, to some extent; though not to pre-rise levels].

However, green energy generators are not impacted by these forces because they don’t rely on the worldwide energy trading market. So you would think that they would not need to raise their prices alongside the fossil fuel based generators.

But they are!

So for us it’s a double-whammy because we have been paying over the average price for many years in order to support the green energy industry. And now that there ought to be some pay-back in terms of not having such steep price hikes, nothing happens.

I challenged our provider about this, and their agent said that the generators they purchased from have raised their prices:
“the price of electricity at any one time is typically set by the last type of generator that needs to switch on to meet electricity demand. In the UK, this is often gas. If that gas is very expensive, then the whole electricity market will be high.” [Ref 4]

This is simply mad! It’s like saying that if supermarkets have to put prices up because of increasing prices of imports, then local producers’ prices will "have to" go up too.

Well I get that Good Energy can’t absorb this so have to pass it on [Ref 4]. But why are the generators raising their prices? They don’t need to! This seems like capitalism at its worst.

We will continue to purchase our energy from a green supplier, but it hurts that the green generators are not playing fair with their own long-term supporters.

Posted by Bruce-the-Sheep at 17:18

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