Red bills, green gas

Katy Brown sheds some light on the companies that supply our homes with the gas we need for heating and cooking.

You can choose to buy gas from one of the big six suppliers, or from one of the emerging smaller companies, all of which also sell electricity.

Climate Change

Natural gas is a fossil fuel and therefore carbon dioxide is released when it is burnt. It is however more efficient in terms of the amount of energy produced per tonne of CO2 released to the atmosphere than either coal or oil. Unlike electricity, mains gas can’t, at least at the moment, be procured from renewable sources, so the key to minimising its climate impacts lie in reduction.

Carbon Offsetting

Five of the companies on the table offer customers the option of offsetting the carbon emissions produced by their gas use with at least one of their tariffs. Climate Aware from British Gas (Centrica) and Utilita’s Planetsaver tariff achieve this through affinity deals with Climate Care. Equigas customers can offset their CO2 emissions through EBICo’s own carbon offset service Equiclimate. EDF customers can sign up to its Climate Balance tariff, partnered with Climate Care and the Carbon Neutral Company. Both Climate Care and Carbon Neutral received greenwash warnings in the report on Carbon Offset companies in the issue 107 of Ethical Consumer, while Equiclimate was one of the Best Buys.

Scottish & Southern says it will plant 6 trees for each of its Power2 ‘green’ tariff customers. However, last year the company was ordered by the Advertising Standards Authority to withdraw a misleading ‘carbon neutral’ leaflet as, although it could provide figures on average household emissions, it could not provide sufficient proof that the number of trees planted would match or exceed these emissions.(18) However, even one of the companies offering such offsetting has a word of warning. It states on EDF’s website that ‘offsetting isn’t an excuse to pollute. It’s a way to take responsibility for pollution we can’t avoid. We must all do our bit to reduce the amount of energy we use as much as we can...’(19)

Reducing Consumption

In 2004 there was a change in government regulations which allowed companies, which were previously obliged to allow customers to change supplier after a 28 day notice period, to lock customers into annual contracts if they could demonstrate improved customer energy efficiency of at least 9%.(24) In other words, the government was offering an incentive for companies to invest in their customers. None of the big six companies chose to take advantage of this change in regulations.(25) Utilita was set up in response to this with the aim of offering customers increased domestic energy efficiency, reducing household carbon levels and helping customers save money.(25) The company conducts an energy survey of every customer’s home and offers ‘planetpoints’ for fuel used which can be exchanged for a range of energy saving measures, including energy saving lightbulbs, loft and cavity wall insulation and condensing boilers.

Of the larger companies, EDF is currently the only supplier to offer its customers an incentive for energy reduction through its Read Reduce Reward scheme. Customers are encouraged to take their own meter readings and in return receive Nectar points. If they consume less fuel in the second year of their involvement in the scheme they are also rewarded with extra points.(23)

British Gas, owned by Centrica, has recently launched a green business arm which will advise homes and businesses on how to become greener and provide them with the necessary products and services. The company already offers insulation services and energy saving reports. In future, customers will be offered solar panel installation for water heating for £4,300. Partnerships with six local authorities mean that in some areas customers who have the panels fitted will qualify for a one-off £300 council tax reduction.(3)

In 2005/06, of the ‘big six’ energy suppliers only Centrica and Scottish Power met the government’s renewable energy obligation solely through presenting ‘renewables obligation certificates’ (ROCs), which serve as proof of renewable electricity generation, rather than having to ‘buy out’ (essentially pay a fine to the government) for the proportion of renewable energy they could not generate themselves.(22) While it is sad that what sets these two apart from the other companies is merely the fact that they are meeting the government’s minimum requirements, it is at least a quantitative way to differentiate between the larger companies on the table.

Fuel Poverty

According to Help the Aged, nearly 160,000 older people in the UK have died from ‘cold-related illnesses’ such as bronchitis and strokes since the year 2000.(1) Recent price increases, partly caused by the UK’s reliance on imported gas from other countries, have been passed onto consumers, worsening the situation. However, wholesale prices have recently fallen again and criticism has been levelled at the energy companies by Ofgem, citing what it describes as the ‘uncomfortable lag’ between cuts in wholesale prices and consumer bills. Tom Clarke, MP for Coatbridge, Chryston and Bellshill in Lanarkshire has accused the big energy companies of forcing people to choose between heating and eating.(2)

A coalition of consumer groups, including Energywatch and Help the Aged, last year charged energy suppliers with making poorer people pay more for gas and electricity, with elderly people among those suffering most. According to the coalition, customers with prepayment meters were paying up to £173 more for gas and up to £113 more for electricity per year than those paying quarterly. The coalition is calling for the six big energy firms - British Gas, EDF Energy, Npower, Powergen, Scottish Power and Scottish and Southern Energy - to make prepaid meter tariffs the same as those for quarterly bills.(1)

Equigas

Equigas was launched in 1999 to provide a solution to such fuel poverty. Instead of penalising pre-payment meter users, which are usually low income households, Equigas charges everyone at the same rate, regardless of how much they use or pay. Instead of offering direct debit customers a discount associated with the savings this payment method results in, the savings are shared amongst all of its customers.

Nuclear

Of the companies on the table, Utilita, Scottish & Southern, Ebico and The Utility Warehouse receive no criticisms for involvement in nuclear power. Scottish Power, which has recently been taken over by Spanish energy company Iberdrola, had cautioned the government against becoming too pro-nuclear, in response to the Department of Trade and Industry’s energy review consultation. It said it did not think the review should announce a need for major nuclear construction at the moment. Iberdrola, on the other hand, is a member of a number of pro-nuclear lobby groups. It remains to be seen whether Iberdrola’s purchase of Scottish Power leads to the company joining other UK energy companies in lobbying for an increase in nuclear power generation.(4)

Links

www.ethico.co.uk provides a switching service for mainstream gas companies using some data from ethical consumer in its ethical ranking.
Help the Aged 207-221 Pentonville Road, London N1 9UZ, tel: 020 7278 1114. www.helptheaged.org.uk, email: info@helptheaged.org.uk
Energywatch helpline 08459 06 07 08

References

1 www.helptheaged.org.uk 3/05/07
2 www.which.co.uk, 23 January 2007 ‘Heating or eating choice “puts lives at risk”’
3 The Guardian, 19th April 2007
4 www.nuclearspin.org 3/05/07 <
b>5 Reality or rhetoric? Green tariffs for domestic customers. The National Consumer Council, December 2006
6 Hazards: 97, 1 January 2007
7 Friends of the Earth International/Link: European Investment Bank special, January 2006
8 ENDS Report: 383 (December 2006)
9 WWF Reports: Dirty Thirty- Europe’s worst climate polluting power stations (2005)
10 BBC News Website www.bbc.co.uk: Chemical firms face cartel probe, 22 August 2005
11 ‘EDF and Climate Change’ EDF Environment Council, located at www.edf.com 26/04/07
12 Probe International in the News email: Bankrolling Nam Theun 2: Laotian dam a test of World Bank’s credibility, 31 March 2005.
13 Workplacelaw.net: Scottishpower fined £400,000 over employee death, 31 August 2006
14 ICFTU:28 June 2002
17 ENDS Report:369 (October 2005)
18 The Carbon Neutral Myth, Carbon Trade Watch.
19 www.edfenergy.com 9/05/07
20 The Guardian, 21st February 2007, 6th March 2007.
21 www.greenoxford.com 9/05/07
22 Renewables Obligation: Annual Report 2005-06
23 EDF Press release 10/06/05
24 Testing domestic consumer take-up of energy services: direction to initiate trial suspension of 28 day rule: Explanatory document, Ofgem, May 2004
25 conversation with Hannah Pearce, Utilita press spokesperson, May 2007.