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Chart of the Week

2021

Green hair, green branches, green skin, green tariffs?

Oliver Archer Senior Analyst

Who knows what Lorca was on about when he wrote his famous ‘green poem’, but it could have been a description of the domestic supply market circa 2021: everything is green. In this Chart of the Week, we look at how prevalent green supply has become, unpick some of the drivers behind this, and look at the challenges now facing consumers, suppliers and policy makers confronted by a sea of green.  Over recent years, we estimate the percentage of households with ‘green’ suppliers – those only offering electricity tariffs backed by Renewable Energy Guarantee of Origin certificates (REGOs) – has rocketed from less than 20% to 65% (Figure 1). Including green tariffs from suppliers that also offer ‘brown’ supply would push this percentage even higher. So what’s driving this huge shift? Are consumers doing their bit to reach Net Zero? Ofgem’s Consumer Perceptions of the Energy Market survey provides the beginnings of an answer. In Q119, 9% of respondents gave green energy as the main reason for switching supplier. In Q420, this had risen to 19%. So, there is evidence for renewable credentials increasingly being factored into decision making when switching. Switching trends do not tell the whole story, though. In fact, nearly 80% of the increase seen between 2019 and 2021 can be attributed to a few large suppliers – E.ON UK, Shell Energy and Ovo Energy – re-branding as 100% green through 2019 and 2020. It is also difficult to tease out the relative contributions of price, service, ...

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