Lowering bills, cutting carbon
19 May 2021
Nothing physically changes in your home or business when you switch to a green tariff. Your power still comes from the National Grid, through the same wires it did before. So, how can a green tariff be better for the environment?
Think of the National Grid as a big pond. Some of the streams feeding the pond supply old, dirty power from fossil fuels, while others provide green electricity from wind and solar farms.
By ensuring that the power we take out of the pond is matched by green electricity going in, we can help make the pond greener overall. If we’re all on green tariffs, 100% of the electricity going into the Grid will have to be green – and we’ll have made a huge step towards halting climate change.
One of the questions we get asked a lot is whether people’s power will be cut off if the sun isn’t shining or the wind doesn’t blow. Because you’re still taking your power from the National Grid, this won’t happen.
Of course, as the contribution of renewables to the Grid grows, we’re going to need to be cleverer about how we balance peaks of supply and demand. That’s going to mean storing power for times when weather conditions may be less favourable, using power more efficiently, and having a mix of green generation sources that allow us to provide power to the Grid at different times. The National Grid has been investing heavily in this area – you can read more about their work here (jargon alert!).
If green tariffs depend on energy companies matching the electricity we use with green energy supplied to the Grid, then it’s important they’re able to prove this is happening. So, whenever a green generator supplies a unit of electricity to the National Grid, the government issues them with a certificate, known as a Renewable Energy Guarantee of Origin, or REGO for short. Your supplier can then purchase REGOs to match the electricity they sell to you. To ensure this process is transparent, REGOs are recorded in a public register, which anyone can access.
Some people criticise REGOs because they don’t cost very much. The argument goes that suppliers can therefore match the electricity you use with green electricity at very low cost. That’s true, but only because not enough people have been on green tariffs, and so demand for REGOs has lagged far behind the available amount of green electricity in the Grid. If we want to use consumer power to accelerate the transition to renewable electricity, the first thing we have to do is close that gap, which is why it’s so important that as many homes and businesses make the switch to green tariffs as possible.
You can read more about REGOs in our blog, here.