“In this way, we are using the existing grid and slowly replacing its input from non-renewable to renewable sources, which is the best we can do without building a rival National Grid,” it says. It also pays the plants a sum that reflects each megawatt hour of energy consumed by its customers. So Energy, which specialises in offering renewable tariffs, tells Guardian Money that its electricity prices are dictated by the cost of gas, but that it has advance purchase agreements with a range of renewable power plants to increase green energy generation.
However, these prices are also affected by the cost of gas because providers of renewables raise or lower their charges in line with the wider energy market in which the fossil fuel remains a key driver. The rest comes from other sources, such as nuclear.Ĭompanies offering green tariffs typically invest the revenue in renewable energy sources, covering the equivalent of the kilowatt hours consumed by their customers. On average only about a third of the electricity from the grid is from renewable sources, while more than a third is powered by natural gas. Energy is pooled in the grid, and when demand outstrips the availability of renewables, the grid tops up the supply with gas. However, many are unaware that because providers rely on the National Grid to distribute electricity, they can’t control its source. More than half of new energy tariffs are now marketed as “green” and 9 million customers have switched to deals that promise supplies from renewable sources.
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