OVO calls for end to industry greenwashing

The CEO of OVO has outlined a new plan to get the UK’s net zero mission back on track, including the proposed reform of ‘100% renewable electricity’ tariffs.

At an event backed by Friends of the Earth, Cornwall Insight, Ethical Consumer and Energy Saving Trust, the CEO of OVO, Raman Bhatia, stated that without significant change, the UK is on track to miss carbon targets, keeping customers reliant on fossil fuels and exposed to high costs each winter – but that a new way forward is possible. 

The UK will fail to reach net zero, Bhatia will say, without reforming current, system-wide practices by the energy industry. He will argue both industry and the government need to take bolder, faster action, with energy suppliers encouraged to improve the energy efficiency of UK homes, incentivise customers to shift energy use, encourage the switch to all electric homes and directly contribute to the generation of additional renewable supply. 

This will mean that customers use less energy and save money. It also drives savings back into the UK economy if renewable tariff certificate practises are changed. This is valuable expenditure which could be reinvested into decarbonisation and home upgrades, like insulation. 

A new kitemark for true green energy 

OVO called for a new kitemark system for the green tariff market, helping customers avoid ‘greenwashing’ practices by clearly identifying which tariffs directly support decarbonisation or the generation of renewable energy. 

Research commissioned by OVO showing confusion and mistrust amongst the public on 100% renewable energy tariffs. Currently, 68% of energy consumers do not believe marketed tariffs offering  for greener energy are genuine offers.

The research also uncovered that 81% of people believe that ‘100% renewable electricity’ tariffs backed by REGOs help fund new renewable energy projects – which is not the case.  Only tariffs which fund new green renewable supply would be eligible for the kitemark. 

Free green tech and customer home visits 

OVO also launched ‘Path to Zero’, a customer plan going further than any other supplier to help each people to  cut carbon emissions and costs in their homes. Support will include free or heavily discounted low carbon tech like smart thermostats, advice to improve home insulation, free tracking and support understanding energy usage, and being paid for shifting energy use to greener and cheaper times of the day.

OVO also announced a new £10 million Green Skills Academy to help the UK tackle the green skills shortage, including the creation of 15,000 jobs. The plan will bring together future skills, education and apprenticeship programmes to shape a greener workforce for decades to come and accelerate the installation of thousands of heat pumps, solar and EV chargers in UK homes. 

The end of REGOs and tariff greenwashing 

OVO commissioned Cornwall Insight to investigate the role of REGOs in the renewable energy system in the UK. The findings were clear. REGOs provide little to no benefit to renewable energy generation, and will instead soon become a drain on customer finances if their use is continued. The price of REGOs is starting to rise and nearly £10bn could be spent on them by 2030.

For this reason, OVO will immediately end the use of REGOs, and will instead focus on decarbonisation of the home and solving the problem of Britain’s coldest and leakiest homes in Europe, losing heat up to three times faster than our European neighbours. At the same time, green technology that can help customers cut costs and reduce unnecessary energy usage is often too expensive for people to afford, and the UK lacks the green skills needed to install new technology at scale. 

OVO’s new offer will directly respond to these challenges by providing customers with energy insights, advice on how to reduce unnecessary energy usage, upgrade or improve their boiler, and use energy efficient technology. 

Bhatia will set out how the need for a national drive towards a decarbonised heating system has never been greater. The recent report from the Intergovernmental Panel on Climate Change (IPCC) outlining a ‘climate breakdown’ and calling for a commitment to reach net zero by 2040 rather than a decade later, the need for fast and significant change is clear.

The Government’s commitment to insulate an extra 300,000 of the country’s least efficient homes is welcome, Bhatia will say, but needs to move faster. Improving energy efficiency, including home insulation, and increasing the UK’s renewable energy supply is the only way to lower energy cost in the long term, ensure a secure energy supply, and respond to the threat of climate change.

In a speech today, CEO Raman Bhatia is expected to say:

“I am the CEO of an energy supplier, and I want our customers to use less energy. I want them to pay us less for their heating, lighting, and power each month. And I want us to help get the UK back on track to meet our climate targets, which demand a 78% reduction from 1990 levels by 2035.

Greenwashing is a luxury no one can afford. By making this change we’ll save consumers money and reinvest in true green energy, and we hope others will follow our lead.”

OVO’s Path to Zero replaces 100% renewable energy tariff backed by REGOs with:

  • A choice of one energy-saving product or service. Customers can pick from things like smart thermostats or a visit from an OVO Energy Expert – providing tailored advice to help make your home more efficient. 
  • Track energy through the OVO app. Customers with a smart meter can see exactly where their energy’s going – from cooking to entertainment. And tells them the greenest time to use energy.
  • Get rewarded for using energy at greener times. Eligible customers with a smart meter can get cash credit for doing this, when they sign up to Power Move. 
  • Plant 1 million trees each year, right here in the UK – with respected tree planting partners the Woodland Trust and The Conservation Volunteers.

Rob Harrison, Co-editor Ethical Consumer Magazine said:

“Ethical Consumer is pleased to see OVO calling for reform of the REGO market and the ‘renewable electricity’ claims that are made around it. This is something we have been calling for for more than 10 years, and will be an important first step in creating more meaningful choices for consumers concerned about climate change.”

Tom Andrews, Senior Consultant, Cornwall Insight said:

“The potential for REGOs to increase renewable electricity generation has not been well understood by consumers. It was not their original purpose, and Cornwall Insight research has shown they have had little to no impact on growing green electricity production. At a potential cost of £1.4bn to GB energy consumers, it’s important to understand the role of the REGO scheme in tracking green electricity from generators to consumers. Government subsidy schemes have supported the vast majority of renewable electricity generation, with the cost paid for through green levies on people’s energy bills. There is much discussion on the viable options for replacing REGOs, however, the very fact OVO are holding the conversation is a positive development for consumers who want to support the growth of renewable energy, as well as the UK’s journey to net zero.”

Dustin Benton, Policy Director, Green Alliance said:

“Improving the energy efficiency of our homes, switching to heat pumps and incentivising electricity use at times that it’s greenest are key ways of helping households to cut their carbon emissions. All smart suppliers in the future will be doing this, and it’s good to see OVO calling out misleading ‘renewable energy’ tariffs which make people feel they’re playing their part without actually changing the carbon footprint of their energy use.”

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