by Simon Lee, published 7 December, 2006 Trouble has been brewing in the UK's burgeoning green electricity market. Last year, an article appeared in The Ecologist slamming 100% renewable energy tariffs from mainstream and dedicated 'green' energy suppliers alike. In search of some clarity Pressureworks spoke to two of the big players; Ecotricity and Good Energy.

Ecotricity was the only company to get away unscathed by the Ecologist report. They were praised for investing heavily in building new wind turbines - the company now carries the article proudly on its website.

Meanwhile, competitor Good Energy has on its website the grand claim to be 'the only company to supply nothing but 100% renewable electricity', and is campaigning for an accreditation scheme 'so that what our competitors are saying and what's actually happening are two and the same.'

'There's a lot of misleading information out there' says Julie Davenport of Good Energy Which leaves consumers who just want to do something positive to help the environment feeling rather confused.

Some clarification from Ecotricity founder Dale Vince OBE

'It's about commitment. We are a green energy company, and what I mean by that is the reason we exist is to bring about an environmental improvement by changing the way electricity is made in the UK, by building new forms of renewable energy so that we can shut down conventional generators. That's our sole mission.'

He says Ecotricity has 'put our money where our mouths are', by investing over £100 per customer building new renewable generation facilities last year, and £900 per customer the year before that.

The figures explained

Currently the UK has around 3 per cent renewable energy. Less than five years ago (before green energy tariffs) the renewable energy was shared amongst everybody. Now it's still 3 per cent but a customer on a certain 'green' tariff will receive 100% renewable energy and someone else will now have 0%.

'People think they.re reducing their emissions, but what happens with a 100% tariff is that you basically cause someone else's emissions to go up, just so that yours can go down'

At privatisation, companies like Scottish and Southern Energy inherited the physical assets of, for example, hydro-generation, and massive amounts of it. In their case, they got it for nothing - a wonderful asset, it generates the cheapest electricity in the UK today bar nothing, so it would never shut down, and it doesn't need the support of a premium green tariff.'

He also criticises large suppliers like npower for being 'massive polluters and investors in nuclear power'.

How good is Good Energy?

'Companies like Good Energy, they don't own generators, they buy the power on short-term contracts from green generators that were (already) in existence, and are very economical because they've paid their debt off, they're running for the cost of fuel, which is very cheap - it's renewable energy!'

'They're some of the cheapest forms of energy out there, there's no way they'd shut down, there's no way they'd struggle to find a buyer. This is one of the myths Good Energy perpetuates, that they're giving vital support to green generators that would otherwise go out of business. It's just rubbish.'

So what about their claim that only around a quarter of the energy sold by Ecotricity is from renewable sources?

'We're very open about it,' says Dale, 'it's not a secret'

The rest comes from the wholesale market. We say to people "Join us as a user of brown electricity" - that can't change overnight, and if it does it.s because we're taking the green energy from somebody else. We won't do that, we build it for our customers. So we've grown from 17 per cent last year to about 30 per cent this year, and we'll grow to about 50 per cent next year.'

Such heavy investment is, he says, only possible because the company is financially independent, and consequently free from pressure from investors.

'I'm sure there are good shareholders out there who would happily not have a return if you're doing a good job,' he says.

'But I think probably the majority of shareholders out there are not those kinds of people. They're the kinds of people who will make demands of you and get angry when they don't get the returns they're looking for.'

Juliet Davenport, Good Energy MD responds

Firstly, we talk about the Ecologist article which she is clearly annoyed about:

'We felt the article was completely non-impartial, and we haven't been given a right to reply. We requested one, because there's a lot of incorrect information - actually the whole premise of the article is incorrect. We tried to go through the Press Complaints Commission, but unfortunately The Ecologist isn't a member so we couldn't use them.'

She rejects the argument that her company simply crowds others out of the market and doesn't create investment in new renewable energy.

'What we believe in is allowing lots of people to invest' she says

'We buy power from over 270 generators in the UK, nearly all of them independently owned. These are people who've invested their own money, who wanted to build their own wind farms - they didn't want us to build them for them.' She says as demand grows, supply will respond with more people investing.

She refutes the claim that Good Energy only buys electricity on short-term contracts.

'They are all completely different. It depends which contracts you're talking about. We've got some that are ten years, and some that are very short term. That you would always have in a growing market, you need to have both, a balance. I don't know, two years out, what power I'm going to need, so some of it I will always have to buy on shorter term markets, but a lot of it I will want to secure on longer term markets.'

And defending the company's financial structure - it is wholly owned by what she describes as a 'holding company', Monkton Group plc - she explains:

'What you've got to remember about being a plc is that it depends who your shareholders are. We've offered discounted shares to our customers because we'd much prefer to have them as investors than private institutions, we know they're interested in what we're doing. Out of around 1,200 shareholders, the majority are from our customer base.'

Like Dale, Juliet is highly critical of the major players' 100% tariffs and sees her own as highly distinct

'In every facet of our business, whether it's political lobbying, trading in the market, talking to renewable generators or talking to consumers, we are there to promote the renewable energy sector. That's the fundamental difference. If you see one of the big guys, when they've got partially green and partially non-green, they will be wearing different hats. They won't be wearing a renewables hat in every facet of their business.'

Make your choice

So there it is. Both Ecotricity and Good Energy say they're different to the big boys because they don't invest in the nasty stuff, and are here exclusively to promote green energy.

Ecotricity uses a combination from renewable and non-renewable sources, and reinvests everything it makes into building new wind turbines. It is fiercely independent and believes in centrally planned expansion, building and owning new turbines itself.

Conversely, Good Energy sells only electricity from renewable sources, but does not invest directly in generation. It turns to the market for everything from finance to the energy supply itself, and believes that the demand it provides creates incentives for others to invest.

The third company, Green Energy, is similar to Good Energy but offers a part-brown/part-green option in addition to its all-green tariff.

Whilst choosing a truly green supplier involves a little more understanding than, say, choosing a broadband supplier you can be sure that whoever you go with will, in some way, be investing in a more sustainable future.