With the majority of energy suppliers now offering a ‘green’ option, it is vital that guidelines be put in place to define what these tariffs should offer in terms of environmental benefits.  Consequently Ofgem consulted with stakeholders as to how to revise the existing system.

The proposals are designed to ensure that green tariffs provide an environmental benefit, defined as: “an activity that results in the delivery of an environmental benefit that would not occur under a ‘business as usual’ scenario”.  They also state that the carbon content will not be used as a measure of environmental benefit. 

Ofgem have suggested a multi-levelled approach where schemes are categorised by the amount of benefit offered.  However it accepted that some benefits would be difficult to convert into a carbon abatement value.  Hence the proposals are based on the amount of financial investment made per year by the energy supplier.  A £10 per year contribution receives a bronze star, £20 a silver and £40 a gold star. 

Ofgem has been instructed that guidelines need to be in place by September.

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