Additionality — Bulb Community

Additionality

If I buy a kWh of green electricity from you, how do I know that it's not simply balanced by another supplier reducing their supply of green electricity by the same amount so no net reduction in carbon emission? (I think this is what Ofgem have in mind when they talk about additionality?)

Comments

  • Hi @faddy, it's a great question and you're right. The term is additionality and Ofgem introduced it for exactly the reason you stated.

    We do our additionality by providing 10% green gas. Biomethane that is anaerobically digested from pig waste. Making it carbon neutral, rather than digging it up out of the ground.

    There is a bit more to the story than just that though. Beyond additionality there are two good reasons to go with a green supplier. Firstly, going with a green supplier increases demand for renewables, which makes it more attractive for investors to invest in more renewable sites. For example, if 50% of people in the UK decided that they wanted to be on a 100% green tariff then the UK would have to supply 50% of it's energy from renewable sources, and non-green generators would have to shut down because there wouldn't be enough demand for it.

    Secondly, think about where the profits go. If you get standard energy from EvilCorp, then the profits for that go towards the things that they stand for. Like fracking. If you go with a renewable energy company then they an invest it in growing their business which in turn means more people go green, demand for renewables goes up and thus more people build renewable generators.

    Hope this helps,

    Will
  • Hi,

    But this doesn't answer the question does it. Does bulb procure 100% of it's electricity from renewable sources, and can you guarantee that those MWhs are "additional"?

    I suspect you are just procuring REGO's to meet your demand, which is much less interesting and in itself does not incrementally improve carbon emissions.

    GB
  • Bulb does get 100% of its electricity from renewable sources ( see https://bulb.co.uk/energy/ ) [it's worth noting, that due how the National Grid works, the electricity that actually reaches your house may be from a non-renewable source - say if you live right next to a gas plant - but if you used 100Kwh of electricity, then Bulb would have made sure at least 100Kwh of renewable energy went into the grid].

    How can Bulb guarantee the MWhs are 'additional'? It's difficult - after all, you could be correct in that every MWh of renewable energy that Bulb provides that 'Evil Utility Company' then chucks another shipment of coal into their generator (as they now can't 'buy' that MWh of renewable energy for their customers). However, as more and more customers decide to vote with their wallets and go with '100% green suppliers' like Bulb and leave the 'Evil Utility Company' then the EUC will have to do something to keep those customers and go green themselves.... But could EUC lie about going green? Yes, but then when OFGEM checks where their supplies come from they'll be found out...
  • Bulb seems second tier in terms of renewable power additionality to Good Energy or Ecotricity then, since these guys reportedly actually directly cause new renewable capacity to be built? The REGO matching situation doesn't cause any absolute reduction in greenhouse gas emissions. Does Bulb have plans to directly finance new, green capacity? (REGOs don't count since no one builds a new wind farm on the basis of extra revenue from these green certificates)

    As to Bulb's "additionality criteria" (green gas / planting trees) - this seems misleading to customers in my opinion... especially with those "equivalent to planting [x] trees" adverts you guys ran a while back.

    Also, what % of Bulb's electricity comes from long-term renewable PPAs with solar. wind etc. developers?
  • edited January 25
    Hi @browntown

    You raise some good questions and talking points. So thanks for resurfacing this post.

    Bulb enters Purchasing Power Agreements (PPAs) with independent generators which guarantee them income. Currently, 16% of our electricity comes from long-term PPAs and we're always looking to increase that number.

    If you'd like to know which green energy sites we're working with you can check our generator page on our website.

    Whilst REGOs alone don't directly fund new generation, they provide crucial revenue for renewable generators. Bulb is contributing to the growth of renewable energy supply by creating greater demand for it. In just 3 years, we've grown to over 900,000 members. This is evidence for the demand for renewable energy in the UK, at a rate we've never seen before. As the demand continues to increase, we can help provide renewable generators with price certainty and longevity. And as supply follows demand, we'll encourage more generation to be built.

    As @Amit at Bulb has explained above, we do our additionality by providing 10% green gas. We also work alongside Trees for Cities. For every member that has signed up to Bulb, we donate £2 to them. In total, we've managed to support the building of over 20 edible playgrounds across the country. We could not claim to be a renewable supplier without these extra things.

    When we say "it's like planting 655" trees, we're not referring to Trees for Cities. We've explained how we calculate this figure on our fuel mix page.
  • edited February 15
    I think you are being misleading by claiming that by buying REGOs you create demand for renewables. You don't. And that's how you keep your prices low compared to other green suppliers. REGOs cost £0.25-£0.5 per unit (MWh) and you can buy these on a secondary market without the associated power. So buying cheap wholesale electricity and "greening" 84% of it using certificates is obviously going to be cheaper than other suppliers who buy the actual units of electricity direct from the generators too. It is by providing competitive and sustainable rates to these generators that you'll support the renewables industry, not by making false green claims and misleading your customers about the contribution they make to reducing carbon emissions by buying into your product. If anything, all you are doing is undermining the value of true green energy and compromising an already fragile industry by failing to provide the financial support that it needs.
  • edited February 15
    Thanks for sharing your thoughts @Smars

    We try to be as transparent as we can about our green energy credentials. That's why we have a page on our website that explains exactly where our energy comes from.

    The price of electricity is the same whether we buy it through PPAs or REGOs. But the current energy market set up in a way that means entering a PPA is time-consuming. This makes it more expensive and impractical for Bulb to supply electricity to its members completely through PPAs.

    We think the best way to increase the amount of renewable generation in the UK is to enter into as many PPAs as we can. That's 20% for now.

    We match the rest with REGOs so we can quickly and substantially drive up the demand for renewables, rather than limit how fast we grow (and there how many people can get onto renewable energy) because of what’s currently available.

    We're not ashamed to say that we want to grow our member base. The more people that switch to Bulb, the more demand there will be for renewable generation. And proving an affordable tariff is a contributing factor to that. The public is voting with their wallets. When Bulb joined the market, only 1% of UK households bought 100% renewable electricity. It’s now 10% and increasing year on year.
  • edited February 15
    Thanks for your prompt response @Eleanor at Bulb .

    The information you provide on your website is anything but transparent. For one, claiming you supply your customers with 100% renewable energy is not entirely transparent. Not all green tariffs are equally green and I'm not convinced you explain this to your customers in a sufficiently transparent manner. I am also not convinced that this has the effect you claim it has on energy customers and the market overall. At most, you should say that your power is "backed by renewable certificates".

    Also not sure what you mean by "The price of electricity is the same whether we buy it through PPAs or REGOs". Assuming you meant "through PPAs or wholesale (plus REGO)", that's not true, and you're welcome to check that with your trading team. And if it was - then why not do the former and support the industry you claim your company is all about? Surely as one of the most successful challenging energy suppliers and with all the investment you've been getting recently, you are in a good position to do so? Surely "time consuming" should not be a good enough excuse for a company like Bulb...

    Finally, the number of households buying "green" tariffs may have increased, but have you taken a look at the state of the market for renewable generators? Small scale and community-scale projects are failing to get off the ground because the REGO option to greening tariffs means value chains are undermined and routes to market and financing options are limited.

    So whilst more people buying into "greened-up tariffs" certainly shows a most welcome change in culture, it does not necessarily mean the the renewables sector is benefiting from it. It just means existing generators will end up selling their output to the grid for much less than a PPA would give them; whilst new projects will have to rely on dwindling government subsidies to secure the financing they need to come online.

    Many thanks for engaging though.
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