Co-operative Energy to sell nuclear + renewables green electricity

Co-operative Energy will sell nuclear electricity as part of its newly-launched green energy tariff, this blog can exclusively reveal today. Unlike existing UK green tariffs, Co-operative Energy – which is launching today at the Royal Institute of British Architects in London – will not discriminate between sources of low-carbon power. Instead, it will offer customers electricity which is guaranteed to be below half the national average carbon emissions per kilowatt hour.

The new scheme differs radically from existing UK green tariffs, such as those offered by Good Energy and Ecotricity, which have been criticised for selling electricity at a hefty premium to customers on the promise that they are helping tackle climate change – whilst actually bringing little if any additional renewable power onto the energy market. [Update: Ecotricity disagrees with this interpretation – see comments below.] Good Energy, for example, offers a ‘100% renewable’ tariff, suggesting that customer demand will help bring more renewables online. But in reality, the existing subsidies and incentives – such as the government-mandated ‘Renewables Obligation Certificate‘ (or ROC) are already more than sufficient to make onshore wind profitable: the major hold-up is getting new wind farms through planning, not a lack of financing.

Co-operative Energy claims to differentiate itself by aiming the change the fuel mix of its portion of UK electricity generation – in essence by buying more renewables, gas and nuclear, and in the process keeping coal stations shut down for longer, and eventually taken offline. Here is an indicative fuel mix from the website:

The website states:

We may also source from nuclear power stations if necessary. That might seem like a controversial choice, because the safety of nuclear power and disposal of radioactive waste remain a concern for many, but nuclear energy is predictable and most importantly, low carbon.Our view is that we need a range of solutions and technologies to reduce our carbon emissions and increase our energy security. There is no single solution.

The scheme is especially notable because the Co-operative Group overall does not seem to consider nuclear energy to acceptable under its much-vaunted ‘ethical’ policy. Its Co-operative Investments banking arm states:

Our sustainable funds don’t invest in companies that are involved in mining, armaments, nuclear power generation, tobacco production or pornography, amongst other criteria.

This suggests the intriguing possibility that the Co-operative Group will have to disinvest from its own energy business, in order to maintain its own internal ‘ethical’ status. Or, more sensibly, it could rescind its anti-nuclear policy and limit its opposition to more obvious bads like weapons, cigarettes and porn.

The new scheme highlights the fact that the existing independent green tariffs have rather boxed themselves into a corner by stating they will only buy renewable power. Good Energy and Ecotricity, for example, are niche market providers that sell ‘green’ power to their customers generally at rates above those offered by other providers – and their customer base has not grown much in the past few years. With onshore wind stalling because of community-based objections across the country, their only additional renewables options are micro-level sources like solar PV and small hydro schemes.

Few of these have been built recently: one Good Energy hydro source dates back decades. Its customers may feel that they are buying green electricity, but that is only because everyone else is getting slightly browner electricity: overall the net difference to the UK’s emissions is probably zero. There is a Green Energy Supply certification scheme in existence, but its stamp of approval does not require a huge amount in terms of ‘additionality’, as its website admits:

Examples of measures that could be considered to be additional include a contribution towards offset activities, green funds, installation of energy efficiency technologies, or research and development into emerging renewable technologies.

In terms of making a big difference in the UK’s fuel mix, however, the only additional renewable source that really counts over the next few years is offshore wind. And offshore wind is a game for the big boys: capital investments come in the billions, and wind farm outputs in the several gigawatts.

Whether the Co-operative Energy initiative can help speed up this transition depends on how far its own customer base can grow. If it is able to challenge the ‘big six’ on price at the same time as demanding a lower-carbon supply in the power it buys, it could make a net difference overall by buying gas and nuclear on the margin instead of coal, assuming that all renewable power would have been sold anyway. The carbon content of power sold by the big six already varies radically, as the chart below indicates:

This information comes from the fuel mix disclosure that each generator must legally pass on to the energy regulator Ofgem. For Co-operative Energy, the company will have to take great care to keep its supply chain transparent, and to ensure that it can keep to the the yellow bar on the right hand side of the chart above. It is not alone in this challenge – Centrica, for example, had to explain at the end of last year why the carbon intensity of its power had gone up thanks to EDF’s purchase of nuclear generator British Energy.

The most important thing of all is that the carbon intensity of the UK’s power sector continues to decline along the lines proposed in the latest Climate Change Committee report, which I blogged about yesterday. But also surely crucial is that electricity customers get a fair deal and do not feel ripped off by being sold existing energy subsidies repackaged as ‘green power’ at a hefty premium.

© Mark Lynas
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