Britain failing to invest in renewables, green energy company claims

In addition, the not-for-profit green energy company said it is refusing to sign up to energy watchdog Ofgem’s new accreditation scheme for green tariffs, claiming it will not encourage energy companies to build new renewable energy and make green tariffs more confusing and expensive for customers.

In its annual WhichGreen survey, released today, Ecotricity found the average investment in new build by the ‘Big Six’ – ScottishPower, Centrica, Scottish & Southern, npower, E.On and EDF Energy – amounted to less than £30 per customer per year over the past five years and claimed this would lead to a 55 per cent shortfall in Britain’s EU renewable energy target of 15 per cent by 2020.

By contrast, Ecotricity said it had invested £450 per customer per year over the past five years in new green energy.

“It is a scandal that the average investment in new build by the Big Six over the past five years does not even amount to £30 per customer.  This £30 is roughly what it would take for each company to meet its bare minimum legal obligation to grow renewables by about one per cent per year,” said Dale Vince, founder of Ecotricity.

He said the burden of risk of growing the renewable energy sector was falling “to the few”, whilst the Government allows the Big Six to continue to place shareholder return before investment on behalf of the customer.

“The UK currently gets less than five per cent of its electricity from renewable sources. We need to increase this 10 fold – 50 per cent in the next 20 years,” said Vince. “Green tariffs and consumer choice of green tariffs – people power - could play a crucial role helping us reach these targets. But Ofgem has sidelined the role of the consumer in one fell swoop by excluding the building of real green electricity from their definition of so-called ‘green tariffs’. Progress will be sacrificed as these guidelines exclude what we all need from a green tariff, which is new green build – the increase of renewable energy in Britain.”

Ecotricity warned that Ofgem’s ‘Green Guidelines’, which were issued on February 4 2009, were in danger of allowing energy companies to ‘greenwash’ their energy tariffs with unrelated environmental benefits that would help them further avoid the responsibility of investing the money that their customers spend with them in building new forms of renewable energy for the UK.

“Green electricity tariffs should be about the creation of new green electricity, first and foremost. In the green guidelines Ofgem is accrediting everything you can imagine except the thing that really counts – new green electricity,’ said Vince.

Ecotricity’s figures showed that on average per customer ScottishPower had invested the most of the six big energy companies over the past five years, but this still amounted to just £28 per customer per year. EDF Energy performed the worst with just over £4 being spent per customer a year over the past five years.

A spokesperson for Ecotricity said the figures were “robust” and had been verified by the other suppliers. “The pound per customer is based on each supplier's total expenditure on building new renewable energy capacity in 2008 divided by the average number of customers in 2008,” she said.

In 2008, nearly 800 MW of new renewable capacity was installed by the UK by the Big Six and independents put together, but the Renewables Advisory board has suggested that wind should provide us with a minimum of 31,000 MW by 2020. Ecotricity said on 2008 investment levels, only 13,849 MW will be invested by then – a 55 per cent shortfall.

Meanwhile, it pointed out that alongside the under-investment by the big green energy companies, other independents, such as Good Energy and Green Energy, hadn’t invested anything in new build over the past five years.

Ecotricity has 30,000 residential customers and said it had invested £50 million so far in building new sources of green energy, accounting for over eight per cent of wind turbines in England. The company said this level of investment demonstrated that it was possible to do things differently “with an alternative energy model that gives power back to consumers”. It said this model delivered an average investment per year of more than 10 times the level required to meet the obligation under the Government’s Renewables Obligation scheme – estimated at £30 – and 16 times more than the nearest competitor per customer per year.

“We need a Green Revolution for Britain – a radical new approach by Government and industry to invest in building renewable energy in the UK,”  commented Vince.  

Ecotricity operates as a social enterprise and has 15 operational wind parks with a total of 51 turbines and 52 MW capacity.  It said it has 24 MW under construction and 50 MW in the planning process, and will submit a further 100MW into planning by April 2009.