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8. Green Juice ?

Although it doesn’t involve a surcharge, which ought to be welcome, not everyone is happy with npowers new ‘Juice’ green power retailing scheme- which Greenpeace is backing. For example, END’s Report 319 was rather uncomplimentary, suggesting that, since npower was evidently still going to claim the power passed on to Juice customers against its Renewables Obligation requirement, ‘it will be free to reduce the level of renewable electricity under its conventional tariffs by a corresponding amount’ and still meet the RO conditions. Consequently ‘Juice will do nothing to force npower to surpass its statutory targets under the renewables obligation’. So there wouldn’t be any impetus to support the development of new renewable generation capacity.

However, npower will, it seems, not claim the Levy Exemption Certificates it could get, for companies using Juice, under the Climate Change Levy arrangements. So if it wants to replace these missed LEC’s, it will have to buy and sell more green power- which could lead to more capacity being ordered. ENDs however saw this as unlikely- unless the scale of uptake for the Juice scheme was larger than its RO target.

Leaving aside the pros and cons of the scheme, the wider implication seems to be that, given the structure of the RO and the CCL, Juice, and possible green power schemes in general, are not going to be a major way to stimulate green power generation. In its consultation paper on the Renewables Obligation, the government argued that ‘green tariffs should not be used to meet a supplier’s costs in fulfilling their obligation but rather the intention is that any green tariff should lead to additional generation over and above a suppliers obligation’.

Some green power retailers, like SWEB, have dutifully ringfenced their tariffs, and are, we hear, not too happy about npowers approach. Given that Juice does not have a surcharge, customers may however not feel they have been short-changed, although, END’s argues, the upshot is that Juice customers will not actually be supporting new capacity- like the offshore wind farm that will be used to supply juice- financially. Ironically, we also hear that existing npower customers trying to make the change are told by npower that they can’t sign up with Juice- so something odd is happening there!

For their part, Greenpeace defend the scheme as basically providing a way for people to demonstrate their commitment to green energy, and thus put pressure on government to provide more funding for renewables generally and offshore wind in particular. Their message seems to be that tariff schemes themselves couldn’t do that much to support new the development capacity. And unfortunately, with only around 20,000 subscribers to green power schemes so far in the UK, that’s seems to be the case.

Greenpeace told END’s ‘we have to think of green electricity as support for the political process rather than an alternative to it’. Even so, it does sees a shame that green power can’t provide a way for consumers to make a real difference. What that would require of course is for a lot more consumers to sign up to schemes that led to more capacity. Sadly though, the DTI seems to be cooling to the idea. The RO consultation paper comments that ‘it is unclear whether and to what extent, green tariffs will continue after the introduction of the obligation’, although it promises to discuss this issue with the industry.

Meanwhile WWF has backed Powergens Green Plan scheme, which has a 3.5% premium. WWF will get £5 for every customer who switches over and a further £5 for every WWF member who sign up. However this scheme is not be counted against the RO, although END’s says that details of exactly how green consumers will be ringfenced are not yet available. In parallel, London Electricity have launched a green fund/tariff scheme, involving a 0.4p/kWh surcharge, with the fund ringfenced for supporting additional new capacity.

Blooming in Holland

Despite being stalled in the UK, greenpower is booming elsewhere - 250,000 German customers signed up last year, and more than 400,000 customers signed up to new Dutch green power schemes in the first two weeks after the market was opened. See NATTA’s new report ‘Greening Electricity’ for more on developments in the green power market