Green Electricity Suppliers in the UK Compared to the Big 6

by Lindsay Wilson in Housing

Back in 2010 we moved out of London to a small town.  In the process we had to change energy suppliers, so we took the chance to sign up to one of the many green energy tariffs on offer in the UK.

A week ago Sarah, a reader from North London, emailed asking if I could do:

 an independent evaluation of just what you get for your money and how they compare to companies that still rely heavily on fossil fuels

So today I thought I’d give it a shot.  In the process I hope I shed some light on how the leading green energy providers compare to the ‘Big 6′.

What is green electricity anyway?

Before I start hitting you with some data it is worth dispelling a misperception some people still have about green electricity supply.

In the England, Wales and Scotland we get our actual electricity from the National Grid.  These electrons come from a mix of sources.  In the last year that mix was coal (38.4%), natural gas (27.7%),  nuclear (20.6%), renewables (11.3%) and other (2.0%). This resulted in average combustion emissions of  0.47 kg/kWh.

When you buy green electricity you are paying for a commitment by your supplier to put green electricity into the grid, in some proportion of what you use.  This is done by procuring renewable energy from power plant owners or building their own capacity.

To use truly ‘green’ electricity you would need to go off grid, and have some seriously great energy storage going on.

Which companies to compare?

Three years ago when I looked at getting green electricity supply for our new place there was a huge array of green tariffs.  Most of them were terrible, and far from green.

Two companies stood apart.  Good Energy, because they only procured and sold renewables, and Ecotricity because they were doing a great job of building wind turbines with company earnings.

As I trawled through the data over the last couple of days, I was happy to see that both these companies have gone from strength to strength.  In fact I think they both have more attractive offerings today.

Although there are some small companies doing interesting things with CHP and hydro, these two still seem far ahead to me. Given this, and in line with Sarah’s request, this post compares these two to the Big 6.

The carbon intensity of supply

Since 2005 all companies in the UK have been required to report their ‘Fuel Mix Disclosure Data Table’ for the year ending March 31.   This means that there is public data that shows us what electricity each company buys, or produces, to be put into the National Grid.

From this data we know the carbon intensity of electricity supplied by each company.  Which is a great place to start.

A few things are worth noting here.

Good Energy in yellow flat-line at the bottom, because they only buy renewable.  Ecotricity in green have been gradually procuring more renewables over time.  And the big orange crash in 2010 was the result of EDF acquiring 8 nuclear plants from British energy.

This chart gives a useful carbon comparison of the Big 6, Ecotricity and Good Energy.

Suppliers’ share of renewables

For many people the renewable share of supply is also of interest.  It looks like this:

This is a pretty hard graph to misread.

Good Energy procures all its energy from renewables. Ecotricity have been building more and procuring more renewables over the years and on August 31st 2013 switched to a singular 100% renewable tariff.

The big six are indeed very big.  So they can’t simply ramp up to 20% or 30% renewables overnight.  That said, many people think they can do better than this.  As you might expect, given the wind resources, Scottish Power, SSE and NPower are making progress.

Who is actively building renewables?

Sadly, there isn’t much independently compiled data on which companies are building renewables in the UK that is freely available.

Ecotricity does a very good job of building their own wind farms given their size, so they have taken it upon themselves to compile an index of the average amount spent per customer on their rather curios Whichgreen.org website.

Their data looks like this:

These figures from Ecotricity show that their spending per customer on new renewable capacity dwarfs all comers.  In particular the figures from Good Energy seem relatively low, though this largely reflects the fact that they have a supplier based model whereas Ecotricity really are a generator at heart.

Sarah’s email asked me specifically what I thought of this comparison, so I’ll try to be honest.

I understand why Ecotricity feels the need to promote its strong record of ‘turning bills into mills’ in the face of numerous tariffs that are pure greenwash, but I fear with little context these numbers are incredibly confusing for most people, and potentially off-putting.

I worry that on first viewing people who aren’t statistically minded get the impression that Ecotricity is a giant of renewable deployment in the UK.  In reality their 62 MW of wind capacity is less than 1% of the 10 GW installed in the UK, much of which is not owned by the Big 6, but rather by developers.  Moreover the history of Ecotricity in installing turbines for 8 years before offering energy to domestic customers makes this framing feel more than a little cheeky.

Then again perhaps being cheeky is the point, and this is just the fickle economist in me kicking in?  The statistic I prefer is that Ecotricity produced 38% of the electricity they supplied in 2012 from their own wind turbines. In contrast wind from all sources in the UK amounted to just 5.3% of generation.

Comparing Prices

The standard price comparison used in the UK press for energy suppliers is the dual fuel bill for 3,300 kWh of electricity and 16,500 kWh of natural gas, paid using a direct debit.

The following is a comparison of our eight suppliers based on these figures from the Energy Helpline.  This was the best data I could find, but I can’t vouch for how objective it is.

I wouldn’t read too much into the precise differences between each of these suppliers, other than to say that neither Ecotricity or Good Energy is particularly expensive these days.

In fact on electricity alone Ecotricity are currently offering to undercut the in-region electricity price of five of the big six.  I find this quite refreshing as when I looked into these tariffs previously the good green tariffs came at a significant premium.  I’d imagine this is largely a reflection of the sharp rise in natural gas prices as we have turned to LNG imports from Qatar.

Customer Satisfaction

Our last category for comparison is customer satisfaction.  For this I’ve grabbed the annual survey data from Which?, which complies an index based on customer ratings of value for money, customer service, billing, complaints and helping you save energy.

According to Which? both Good Energy and Ecotricity are miles ahead of the Big 6 for customer satisfaction.

Those aren’t the kind of gaps you get from sampling error.  These two companies are clearly doing something that makes people like them more.

You can see the rating in full at ‘Which?’

Is is time to switch to green electricity?

Choosing a green electricity supplier has always made sense from an environmental standpoint.  The refreshing thing today is that you don’t need to pay a huge premium to switch to a good green supplier.

There remains an argument as to the relative effectiveness of different tariffs, and whether this is the most cost-effective way to cut carbon, but the principal is solid.

What’s to like about Ecotricity?

There is a lot to like.

If Richard Branson and Elon Musk had a love child it could well be Dale Vince, the founder and CEO of Ecotricity.  He’s one of those proper chance taking, shoot from the hip entrepreneurs, and I’d love to see what he could do with even more funds to play with.

Ecotricity operates a unique business which they call ‘bills into mills’.  It is a not for dividend company that ploughs its earning back into building more wind turbines.  This is not spin! (terrible pun I know).  You can see on their company history page how their wind deployment has increased in lockstep with their customer numbers.

Since August 31st this year Ecotricity started offering a single electricity tariff that is 100% renewable.  Although this may have largely been the result of new Ofgem regulations that saw bigger companies remove green tariffs, I think this is great news for Ecotricity.

The fact Ecotricity previously procured some coal, gas and nuclear was off-putting for some of their potential clients in the past, even if it was necessary to build more wind.  That was the case for me.  However with one simple 100% renewable tariff and a greatly timed price freeze promotion it is little wonder they have just signed up a record number of new customers.

Ecotricity also aren’t just about power supply.  They are one of the leaders of installing electric car charging infrastructure and working on green gas, power storage and urbines.  They’ve also raised two rounds of community ecobonds allowing ordinary people the chance to invest £20m in wind projects.

If building new renewable capacity is the main thing you want from your utility then you should check out Ecotrcity.

Why I can happily recommend Good Energy

Good Energy has supplied 100% renewable electricity to the grid for a decade now, that makes them unique in the UK.  This electricity is sourced from 550 independent renewable generators around the UK, for which the company has become a rowdy advocate.

We switched to Good Energy back in July 2010, when we moved out of London.  I was quite torn at the time between Ecotricity’s build out record and Good Energy’s 100% certified renewable procurement.  The thing that swayed me to Good Energy in the end was little to do with either of these.

I was intending to add solar panels to our new place and Good Energy had been running their HomeGen program since 2004.  A friend had recommended them for this, and I also appreciated the host of energy-saving literature on their website.  So Good Energy it was.

The reason I can happily recommend Good Energy is there really is nothing to report.  We’ve had solar panels for two and a half years.  Everything works and the Fit payments are smooth.

We are perpetually dis-organised in paying our bills, but even if you’ve been away and are close to the debt collector phase this is how your reminder goes:

Dear Mr Wilson,

Just a little reminder . . . 

A couple of weeks ago we sent you a bill for £62.48 but we have yet received a payment.  If you’ve sent it in the last couple of days, please accept our apologies for getting in touch and ignore this letter.  If you’ve simply forgotten, don’t worry, just give us a call . .

I know things like this don’t matter much, but we were once with NPower and they cut off our gas for two weeks with no notice while my wife was 8 months pregnant.  No apology.  The contrast between the two is not lost on me. It’s the same on the phone, as if they have taken people from John Lewis and stuck them through finishing school.

Although Good Energy aren’t a developer at heart I am still keen to see them build more projects. They recently raised a £15m community bond which should allow them to develop a couple of wind and solar farms that already have planning permission.  I’ll be pleasantly surprised if they make their stated aim of 110 MW by 2016, but it’s great that they have a bunch of projects on the go.

Based on my three years as a customer of Good Energy I can happily recommend them.  You can check them out here .

(The Good Energy link is an affiliate link, my first in fact.  I like their work and am happy to promote them).

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  • Dale Vince

    Hi Lindsay, I think you’ve done a pretty good job of being impartial here, especially considering you are a Good Energy customer and affiliate. There are a couple of things that I feel need correcting or commenting on though, if I may. To an extent it’s down to the complexity of the market, but not completely. I’ll follow your headings;

    1) Which companies to compare. In this section you make the claim that ‘Good Energy only procured and sold renewables’. This is not true, though it is a claim that Good Energy used to make until recently. The fact is that Good Energy buys and sells brown energy in order to balance it’s energy trading position, as all suppliers must. This position was upheld by the ASA recently. It may or may not sound like a small thing, but clearly the impression being given was one of a total green supply and non involvement with brown energy sources – incorrectly.

    2) The carbon intensity of supply. You repeat the claim in this section. And here it leads to the claim that Good Energy has no carbon content in it’s energy supply. Which is true to an extent – which is to say according to the rules of FMD (which I have no issue with). The carbon intensity figures here are derived from Fuel Mix Disclosure – the rules of this only cover retail supplies of energy, so to achieve a 100% FMD and thereby zero carbon content – you only have to match end user sales with green purchases. The brown stuff is traded wholesale and does not feature in this measure. So companies can use brown energy, with a carbon content, to balance themselves – but avoid the responsibility for that carbon. As I say above, all suppliers must do this, so this is not a criticism, more point of information.

    3) Suppliers share of renewables. This is actually the Fuel Mix Disclosure data. You repeat the claim here, that GE only procures renewables – which they do not. But under FMD rules, which only cover retail activities and ignores wholesale brown energy trading – then it is correct – but it’s important to qualify this as something that only covers retail operations – not the whole supply operation. Again, this is intended as a point of information.

    4) Who is actively building renewables. You attempt to partially, at least, explain the difference in the spending figures between Good Energy and ecotricity as being down to the fact that ecotricity are ‘really a generator’ while Good Energy ‘have a supplier based model’. This is totally incorrect. The difference is actually simply explained by the fact that ecotricity has dedicated itself to building new capacity for longer – Good Energy built their first wind park a few years ago, and only recently moved to adopt an approach of building. We are both generators and both suppliers.

    I’m not sure why you find the numbers confusing or without context – they are an annual per capita expenditure figure. It really does not get much more simple than that. And for context you have the performance of the whole market place – and a nine year time period.

    You say – “Moreover the history of Ecotricity in installing turbines for 8 years before offering energy to domestic customers makes this framing feel more than a little cheeky.”

    If you look again at the figures on Whichgreen you will see that they are for the last 9 years only – they began after ecotricity began to supply domestic properties – and after the eight year period you mention. Those 8 years do not feature in the statistics at all. No cheekiness, just straightforward per annum expenditure building new green – per customer.

    The figures are quite outstanding and perhaps that encouraged you to try and find a problem with them – but they are solid.

    You say the figure you prefer is that ecotricity produced 38% of the electricity it supplied in 2012 from it’s own windmills – and compare that to the 5.3% average of the market. That’s a good point, well made. But you’re missing a key statistic here, for full impartiality, and a proper comparison – the figure for Good Energy, which I think is around 10%.

    That’s it. I thought your blog was very interesting and for the most part accurate. It’s particularly useful to see how a customer of green energy, albeit one that’s more informed than average I would say, sees the market. The electricity industry is complex, the green side only more so. Simplifying it while keeping it honest is a challenge.

    I hope that these comments are useful.

    And thanks, I think, for the Branson/Musk lovechild reference… :)

    Dale.

    • Lindsay Wilson

      Thanks for the really impressive detailed comment Dale. These comments are indeed very useful and I really appreciate the constructive tone of your comment.

      I’m not a great student of the UK electricity market, so I can make a few corrections based on what you’ve told me here. The point about trading balance and the Good Energy self production at around 10% are both things that can improve the post.

      If I’m honest, I still find the framing of the Whichgreen numbers pretty hard to stomach, and I didn’t misuderstand the start date at 2004 at all. I’m sure you would have been sued if the numbers were incorrect, I don’t doubt they are correct. It is the framing of the averages like this I dislike. Dividing total investment in 2004, underpinned by corporate customers, by a very small base of domestic customers results in huge numbers for those early years surely? That is my issue. You can’t of paid for 8 MW of wind with 3,000 retail customers in 2004 surely.

      Anyhow, I don’t like being snotty about this, because to be honest if it hadn’t been for the Homegen stuff I would probably be a happy customer of yours. I love you non-dividend model. I just dislike the presentation of averages like this. I will revisit your methodology when I get a moment.

      If it is any consolation you are getting more click through than GE. Perhaps its that catchy price freeze ;-) The Branson/Musk lovechild reference was indeed meant with a high level of affection.

      Thanks so much for your time, I appreciate it, and will make a few amendments once I can wrap my head around your points.

      Regards, Lindsay

      • Dale Vince

        Hi Lindsay, thanks for your response. It’s great to have a constructive dialogue on these issues.

        The Whichgreen statistics are stark and that fairly automatically leads to suspicion, especially since it’s originators do so well in them – that’s to be expected I suppose.

        At the time we were trying to come up with a measure of the actual commitment energy companies were making. The various announcements of programs and projects and promises provided no context at all for a comparison – and for us the acid test of commitment to green energy had to be in the building of it.

        And so we came up with the idea, it’s quite simple really, of the amount spent each year, by each energy company, actually building new sources of green energy. For real context that needed to take into account company size and so we chose to use a per capita (or per customer) ratio. This gives a figure independent of company size – it’s per customer, which has the added benefit of providing something meaningful to people looking at where best to spend their energy bill – it tells them how much will be spent on their behalf, of at least gives an indication based on past performance.

        In the early years (it’s a nine year old initiative now) we had an amount of huffing and puffing from the Big Six, some legal threats and all that – British Gas in particular did not like the measure but one thing they said seemed fairly reasonable – the figures did not take into account the money they were going to spend and the time it takes to get green projects off the ground. However one of the key things about these stats in or opinion is that they cut through the promises, which are easy to make – and over time they expose a lack of action. British Gas is a great example, nine years later they still rank very poorly. Of course delays in planning affect all energy companies equally – it’s time that really separates the genuine from the not so. And nine years is a long time.

        We turned the statistics into a rolling long term average rather than a single year snap shot several years ago, to make them more meaningful, to smooth the individual years.

        Coming to your point – BTW you’re absolutely right we would have been sued by now – even the Co – op threatened that, and Good Energy refused to recognise the approach until a year or so ago when they adopted it themselves, actually even one of the Big Six has adopted it in it’s own advertising, conveniently comparing itself only to the other Big Six, I think it was Scottish Power, anyway –

        One MW of wind costs roughly £1m to build, and it’s normal (even for the big guys) to use project finance which means borrowing 80% and putting 20% equity in yourself – so £200k per MW of wind, roughly. Our 8MW in 2004 would have cost us roughly £1.6m. Definitely we would not have made that much from our retail customers alone, but we had business customers as you say and we had income from our existing generators too – and money from previous years.

        What I can assure you is that we did build that 8MW and we did fund it (the equity part) ourselves from our own resources – we have no backers, the money we spend each year we first have to earn. I think it’s our ‘not for dividend’ model that sets us part in that respect – we re invest each year, all that we can. And of course the years are lumpy, some have little or no generation built in them and some have huge amounts (relatively) – that’s all about the vagaries of the development process.

        Right now we have 60MW operational, all self funded, designed, built, owned and operated by us. With 80MW or so consented and coming soon. And another 100MW in planning – with roughly 100MW more going in each year. That’s the shape of it. It’s a big undertaking, a big commitment. But we’re absolutely clear that we can do it – and only because of our customers – it’s our bills into mills model that make this work.

        Please do take a look at the methodology of Whichgreen, it’s been crawled over by various lawyers and the ASA, but I would value the opinion of someone with an economics background and an interest in green energy. I honestly think it is a fair and robust measure – the best way to measure actual commitment to green energy building. It seems to have stood the test of time, and actually has become more meaningful as it’s been based on longer term data.

        I think it shows how little most energy companies are doing to actually build new sources of green energy – and therein lies it’s real use.

        Cheers.

    • http://zacharyshahan.com/ Zachary Shahan

      Dale, thanks for chiming in here in such depth! I thoroughly enjoyed Lindsay’s article, but it is really useful for us “not in the industry” but very interested in getting as much information as fairly easily possible from an expert such as yourself.

      Also a big fan of your work, as an article I’ve scheduled for tomorrow morning on CleanTechnica.com indicates. :D

      • Dale Vince

        Hi Zachary, glad you like our videos. I love the Mr
        Wind one, not seen it for several years, it’s a classic… :)

        • http://zacharyshahan.com/ Zachary Shahan

          Definitely, and your marketing style in general. Keep it up.

  • http://zacharyshahan.com/ Zachary Shahan

    Great article, Lindsay. As I think you know, I don’t comment much outside of my sites, as I simply don’t have time and think it’s worth the time, but I do chime in once in awhile for exceptional pieces. Really appreciated the work on this one, and it was obviously noteworthy enough do get even more information added to it by Dale.

    It would be a hard call choosing between the two. I can’t even say who I’d choose, but I lean towards Ecotricity — probably because of the effort it puts into building wind power capacity and EV charging stations, and also because it has simply been on my radar much longer (familiarity does sell). But it would be a very hard call, and I’d probably dig in even a little more now, building off of the tremendous research you have done (on my own, I probably wouldn’t have gone as deep as you have).

    Btw: Dale is certainly a cleantech rock star. I think the Musk/Branson comment may have helped with the clicks through to Ecotricity. That was very catchy. :D The link on the actual name and the price freeze link must help as well. I see Good Energy is also freezing its prices, but I can’t tell from a glance if it is for as long as Ecotricity.

    Cheers. Thanks again! A fun late evening read. :D

    • Lindsay Wilson

      Thanks Zac, I must say given that I know your posting schedule I’m always very flattered when you chime in. I’ll make some amendments and draw attention to Dale’s comments in the body when I’m back at it.

      • http://zacharyshahan.com/ Zachary Shahan

        You certainly produce some of the best blogs around. :D

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  • Kirsty

    Hi Lindsay. The one chart I want to see is one showing each company’s share of the UK renewable capacity. Any thoughts on where I can find this? I am constantly been prodded to join Good Energy from my current supplier (EBIco – the only non-profit, only one without a standing charge and most serious company interested in fuel poverty and energy equality in my opinion)… but the huge blot on their copy book is that they get their energy from SSE. I can see SSE are 2nd behind Ecotricity in investment in renewables but want to know the scale we’re looking at. SSE claim to general 21% of the UK renewable capacity… but I’d like to know how this compares to Good Energy. Are they a significant generator? Thanks in advance if you can help. Kirsty

    • Lindsay Wilson

      Hey Kirsty. That is actually a tricky one. New Energy Finance would have the data, but it isn’t public. The real problem is that building and ownership of wind farms isn’t just a utility thing. If you look up wiki for the onshore and offshore wind lists you’ll say loads of developers like Dong, Vatternfall, Statoil . .. Good Energy are tiny in terms of generation, Ecotricity are bigger but still only 1% or so. But the minors are just so small in terms of their business size. If you found out generation totals you could reverse it out use the graph figures above. Best, Lindsay

      • Kirsty

        Great, thank you for this. I do wonder what Good Energy would do if there were a mass switchover to them… turn people away I guess? I went digging in the SSE annual report and found enough to keep me happy with using them, albeit via a more ethical intermediary supplier. They own some wind and wave farms and buy a great deal from the developers you mention. I still find it hard to jump on the Good Energy bandwagon – great intentions and great customer service by the sounds of it but they’re just not making any serious contribution to helping the UK meet its renewable energy targets. It’s great you have thought about it so much about it too – here’s to more people actually thinking about who they buy their energy from :) Kirsty

        • Lindsay Wilson

          Actually both GE and Ecotricity are better placed to take new customers these days. Since the new rule about offering fewer tariffs it is easy for them to buy renewable energy on the market, that is why Ecotricity now has a 100% green tariff. As for Good Energy they have recently raised money and have a bunch of new solar and wind in the through planning that on a per customer basis will make them look very good indeed. Cheers, Lindsay

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