Buyers to face green power shortage in October talks

4 September 2002
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05 September 2002 | David Arminas

Buyers seeking green electricity to bolster their corporate image could find it in increasingly short supply in the run-up to October’s round of contract talks.

Energy regulator Ofgem recently began issuing renewable obligation certificates (ROCs) to generators officially certifying their output, or a portion of it, from an environmentally friendly source.

The creation of renewable energy - including power from wind or tidal sources - does not produce carbon dioxide, a main contributor to global warming. This was one of the main topics at the World Summit on Sustainable Development in Johannesburg, which finished yesterday.

Ian Dobson, chairman of the CIPS energy committee, said the ROCs show that suppliers have been mistakenly calling some of their electricity green, such as generation of methane gas from waste sites.

“ROCs tell you what is officially green and how much a supplier has to sell,” he said. “There was always doubt that what the supplier was selling was green and nobody was checking them.”

David Thomas, chief executive of the Consortium for Higher Education Energy Purchasing, which buys for 133 educational institutes, said the shortage of green power was already acute and was getting worse.

Higher generation costs have meant that green electricity usually sells for 0.43p/kWh above the price for normal electricity.

Its exemption from the climate change levy made it the same price as normal electricity, said Thomas. “But we have been seeing clients pay the premium price of 0.49p/kWh.”

Andrew Swift, senior buyer with Thistle Hotels, said the 6 per cent of electricity it took from green sources was important to securing business.

“The certificates are good, as we have corporate clients who decided to use our hotels because we take power from a renewable resource,” he said.

Suppliers are obliged to take 3 per cent of their power from green sources in 2002-03, rising to 10.4 per cent in 2010-11.

SMsep2002

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