There’s a move afoot among certain sectors of the energy and business community to make assessing the environmental credentials of your energy supply akin to comparing electrical appliances.
I’m referring to the A-G rated electricity labels that tell you how energy efficient – or otherwise – fridges, washing machines and the like are.
Now, in a ground-breaking deal with BT, npower has applied this rating to the electricity supply the telecoms giant receives. With 100% of its power matched to 100% renewable energy, BT gets a top-of-the-class A rating.
This model is one many other large organisations are keen to emulate, as was evident at last week’s launch of the Enable the Label report in London, where businesses joined BT, npower, Ofgem, Utilyx, Ernst & Young and others to explore an industry-wide adoption of electricity supply labelling.
Simplify carbon reporting
Supporters believe that electricity labelling will help to improve supply transparency and make it easier for consumers to report carbon emissions associated with energy use.
The current system of carbon reporting is seen by many as complex and inconsistent, with green electricity recognised as zero carbon by some regulations, such as the Climate Change Levy, but not by others, eg the CRC Energy Efficiency Scheme.
The thinking is that if suppliers could clearly display the quantity and carbon content of electricity sold on each customer’s bill, that would ensure greater clarity and consistency.
However, currently there is no universal methodology for reporting your carbon footprint, so consensus and standardisation among all would first need to take place.
Boosting renewable demand
Findings in the Enable the Label report also suggest that an electricity label could increase demand for low-carbon electricity in the industrial and commercial sector four-fold, from the current 14.4% to 48.3% by 2020.
This view is reflected by Ofgem, which reported last December: “If enough customers express preference for renewable energy, this could potentially drive a change in the grid fuel mix in the future.” However, this would take more than a few years to achieve.
Currently, there is only a finite amount of renewable energy available. But if consumer demand – rather than increasing levels of government policy – were to drive further development of renewable generation capacity, that could only be a positive thing.
There’s also the issue of how the renewable energy we have is apportioned. After all, every consumer supports renewable generation through policy taxes on bills for initiatives such as the Renewables Obligation, Climate Change Levy and soon, Contracts for Difference.
If you want to find out more about energy labelling, you can access the Enable the Label report here.
Wayne Mitchell is npower’s I&C markets director.
This is a sponsored article.