Energy bills: ‘I have a green deal, so why am I paying conspicuous sums?’ | Energy bills

Hhouseholds on green energy tariffs, which assumed they would be unaffected by rising gas prices, have been shocked to be told that their electricity bills are rising, despite being signed up for a renewable supply.

Suzanne Taylor has been told that her fixed daily rate at the renewable energy supplier will double from 16p to 32p per. unit if she renews it this month. “The same thing is to blame for the current energy crisis,” she says. “Its website says that 100% of its electricity is supplied from renewable sources, so why should it be affected by gas prices?”

More than half of the new energy tariffs are now marketed as “green”, and 9 million customers have switched to agreements that promise supplies from renewable sources.

However, many are not aware that because providers rely on the national electricity grid to distribute electricity, they can not control its source. Energy is collected in the grid, and when demand exceeds the availability of renewable energy, the grid fills up the gas supply.

On average, only about a third of the electricity from the grid is from renewable energy sources, while more than a third is powered by natural gas. The rest comes from other sources, such as nuclear power.

Companies that offer green tariffs typically invest the revenue in renewable energy sources that cover what is equivalent to the kilowatt hours that their customers consume.

However, these prices are also affected by the cost of gas, because renewable energy providers raise or lower their taxes in line with the broader energy market, where fossil fuels remain a key driver.

So Energy, which specializes in offering renewable tariffs, tells Guardian Money that its electricity prices are dictated by the price of gas, but that it has pre-purchase agreements with a number of renewable power plants to increase green energy production. It also pays the plants a sum that reflects every megawatt hour of energy that customers use.

“In this way, we are using the existing grid and slowly replacing its input from non-renewable to renewable sources, which is the best we can do without building a rival National Grid,” it said.

Suzanne Taylor was told that her fixed daily rate with the supplier of renewable energy would then double from 16p to 32p per. unit when she renews it this month. Photo: Suzanne Taylor

Another specialist supplier, Good Energy, says that although it supported all the power it supplied with electricity purchased from a community of more than 1,900 generators that directly invested in the growth of renewable energy, it was still affected by wholesale prices.

“The prices we pay for generators are affected by the wider market, but also … we still have to trade wholesale power. We match customer demand with renewable energy as much of the time as possible, and of course 100% across of a year, but when there are shortcomings, our trading team must look at the wholesale market, ”it reads.

Campaigns have warned that people may be misled by sales talk that does not reflect the complexity of the green energy market.

“Basically, you should consider that your electricity has the same CO2 footprint as everyone else’s, no matter what tariff you have,” says Josie Wexler, a researcher at Ethical Consumer. “Ofgem [the energy regulator] should force companies to be much more honest about what “100% sustained” really means. “

Wexler says the specialized providers have the strongest arguments for saying that their tariffs are fully renewable because they invest in their own facilities or have purchase agreements with clean energy producers.

These agreements guarantee that the purchase of energy matches all or most of their customers’ consumption. Ecotricity and So Energy parent ESB construct their own sources. Good Energy and Green Energy have electricity purchase agreements that cover 100% of their customers’ electricity consumption. Wexler adds that Ecotricity also avoids the fossil fuel market.

As customers find out their costs, some of the specialists are not covered by Ofgem’s variable price ceiling. Ecotricity, Good Energy and Green Energy have a permanent dispensation because their variable agreements are the ones customers have chosen to be on and because they support the production of renewable energy.

While the price ceiling means a typical unit price for electricity of 21p per. kWh, Good Energy and Ecotricity’s are set at around 34p (see box). Taylor’s business, then, is price limited, so its variable rate will be cheaper than the new fixed price it has set her.

Ofgem says that although gas remains a fixed component of the electricity market, it will affect green tariffs and suppliers must not make unfounded or confusing claims about their energy sources.

“When we move to net zero, it is crucial that consumers can trust suppliers’ claims about renewable energy and that these are supported by appropriate evidence so that they can make informed choices about their supply,” it said. “We expect all suppliers to comply with the rules for disclosing where they obtain their electricity from, and we will continue to monitor compliance and take appropriate action where this is not the case.”

Taylor feels misled. “So Energy says very clearly that all of its power is green,” she says. “The fact that suppliers have to use the National Grid may be true, but it’s not clear to the consumer if you’re not in the energy industry.”

So Energy says it has links from its website to places where you can find this information, and has “always been transparent and clear” about how the energy is delivered.

“I’m so worried about price increases that I’re considering moving out”

Kirsten Downer is a furious Ecotricity customer who feels very let down. In November, the supplier raised the unit price of its economy 7 electricity by 29%, saying her expected bill for the two-bed apartment in south-east London, which she shares with a tenant, would rise by £ 480 to an “unaffordable” £ 2,362 per year.

She currently pays more than 35p for a day-timed electrical unit compared to the limited average of 24p / kWh. Her nightly rate is more than 16p against 12.5p paid by neighbors at standard rates.

Kirsten Downer
Kirsten Downer says her unit costs rose 40% last fall. Photo: Kirsten Downer

“I am so concerned about these price increases that I am considering moving from my home where I have lived for 20 years,” she says. “My unit cost increased by 40% last fall and my most recent monthly consumption was 311 GBP compared to 90 GBP a few years ago. All I read about is what will happen to the families currently protected by the Ofgem price cap when it increases in April.

“But what about those consumers like me who did the right thing by drawing a green tariff, but who are now paying conspicuous sums as a result? There is no cover yet for us already suffering from fuel poverty. I have tried to switch to a cheaper supplier, but was told that they did not take new customers – which means I’m stuck with these unaffordable bills. ”

Following the Guardian’s intervention, Octopus Energy has agreed to take over Downer’s supply from Ecotricity, which should bring her bills down significantly when she moves to its standard variable rate, which is covered by the price cap.

A spokesman for Ecotricity said: “The price cap is expected to rise by around £ 700 in April – and this increase will close the gap in our tariffs to competing suppliers. The deviation allowed us to react to movements in wholesale prices before the rest of the market. We do not expect our prices to rise in April – but we can not predict exactly what will happen next due to the volatility of the wholesale energy market – and the fact that the government has not yet revealed how much of the cost of supplier failure will be put back on the energy bill. “

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