Sceptical Friend — Bulb Community

Sceptical Friend

Hi,

I just switched to bulb and excitedly posted about it in case other friends wanted to too.

A friend who is very "clued up" about green issues, used to work for the Energy Saving Trust, immediately posted this:

"If they don't retire ROCS they're greenwash. Doesn't make the slightest bit of difference whether they're "100% renewable". All they're doing is subsiding the big six and taking your money for the privilege."

I'll admit I don't know what ROCS are, and how to tell if you 'retire' them. Do you?

Thanks :)

Comments

  • edited September 2016
    Hi @viv

    Your friend makes a great point, but I think it needs a lot more context to fully explain, so here comes the essay :)

    ROCs are Renewable Obligation Certificates. These are awarded by Ofgem to generators of renewable energy as a form of subsidy to enable them to operate profitably. They get 1 ROC per MWh. The generators then sell these to energy suppliers who are legally required to buy and retire 29% of a ROC for every MWh they supply. This is the mechanism through which renewable energy is subsidised in the UK. It's effectively a pot that all suppliers pay into and this is dished out to renewable generators to help them out.

    Crucially, retiring ROCs is not the measure of how renewable a supplier is. It is simply something that every supplier has to do. "Renewableness" is measured by REGOs.

    REGOs are Renewable Energy Guarantee of Origin certificates and these are also awarded by Ofgem to generators at 1 REGO per MWh. These prove how the energy was generated. As a 100% renewable supplier we buy and redeem 100% (actually, it was closer to 250% last year) of a REGO for every MWh we supply. This is reflected every year by Ofgem in their fuel mix disclosures published in July. Here's a blog with a graph showing various suppliers fuel mix last year. As you can see, there are only three 100% green suppliers, of which Bulb is one.

    https://blog.bulb.co.uk/important-energy-supplier-100-renewable/

    Our grand plan is to make 100% renewable supply affordable and make the demand for renewables mainstream. This would drive up the demand and price of REGOs. Which would make renewable generation more interesting to investors.

    Now, your friend's point is super interesting. Buying and retiring more ROCs than needed is a great way to go above and beyond to promote renewables. By retiring a ROC you reduce the supply of available ROCs. If you retire more than 29% you force another supplier to create more renewable generation to create more ROCs in order to meet their legal obligations. So, if we retired more ROCs we'd effectively be making someone else more renewable without them realising it.

    But what else is there that we could do to promote renewables further? One problem with retiring ROCs is that no one has the foggiest what it means. It's taken me several paragraphs just to explain this far which makes it difficult for us to be held accountable for promises we might make about it. What we do instead is supply green gas. It's a much more tangible thing. Everyone can understand that 10% green gas means a 10% reduction in carbon from their gas usage. Simple. ROCs less so. By supplying green gas we are in effect more than 100% green by Ofgem's definition. And we intend to keep increasing our green gas proportions too.

    There are other ways to promote renewables further. We think the best way to promote renewables, especially long term, is to make it self-sustaining. We can do this by increasing the demand for REGOs and green gas (and thus investment in renewable generation). We'd rather do this than effectively throwing more money into the subsidy pot which isn't self-sustaining.

    I hope this helps and it's clear. We're super happy to answer any questions you or your friend have. We want to be open and transparent about this, and of course, we're always looking for suggestions about how we could make Bulb better, including being even greener.
  • Hi, a question about ROCs and REGOs.
    So, even though bulb is 100% renewable, you still need to buy ROCs. Is that right?
    Do REGOs also need to be purchased or are they free?
  • Hi @fede -- great questions.

    Renewables Obligation Certificates (ROCs) and Renewable Energy Guarantees of Origin (REGOs) are both subsidies that support renewable energy producers, paid for by energy suppliers.

    REGOs are what suppliers use to prove the renewable-ness of their energy.

    ROCs are certificates that suppliers must buy in proportion to their customers' consumption, regardless of their fuel mix. The government sets a proportion of MWh supplied for which suppliers must buy ROCs.

    To make matters slightly more complex, there are other policies to support new low carbon initiatives: Contracts for Difference and Feed in Tariff.

    Regarding ROCs: as with all other suppliers, we must either buy about 3 ROCs for every 10 MWh we supply -or- pay a buy-out fee at the end of the year of about £45 for every 0.3 MWh we supply. To free up cashflow -- which allows us to deliver lower overall prices -- we use the buy-out method.

    Regarding REGOs: Any renewable energy produced comes with 1 REGO per MWh. So, a supplier that supplied 100MWh and say they're 50% renewable need to submit 50 REGOs to the government. A "100% renewable" supplier like Bulb needs to submit a REGO for every MWh of electricity our customers use, as part of our Fuel Mix Disclosure.
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