Select Committee on Environmental Audit Appendices to the Minutes of Evidence

Annex B


  The following response is submitted on behalf of London Electricity Group plc, which incorporates the supply businesses of London Electricity, SWEB and Virgin Energy.

  We welcome the opportunity to comment on Ofgem's proposed guidelines applying to green supply offerings. Whilst we are in broad agreement with the principle that Green Supply offerings should be transparent and verifiable, we have reservations about some of the prescriptive elements of the guidelines which we believe will stifle innovation in the marketplace.

  The section defining renewable technologies is unnecessarily specific about individual renewable sources. The paper correctly recognises that some sources have other environmental benefits and the importance of customer perceptions is important in relation to what is accepted as being renewable. This is the very reason why Ofgem should not prescribe what sources are allowable but should allow customers to choose between offerings depending upon individual preference.

  We believe the Guidelines should provide a customer with the ability to consider different supply offerings whether a premium is or is not included. The guidelines should ensure that a supplier makes its offering as transparent as possible and should not prevent a supplier utilising ROC's associated with the energy backing the offering as long as this is clearly stated.

  We believe that the Guidelines should refrain from being unduly restrictive about what does or does not constitute a "green supply offering", but should rely upon the principles of verification and transparency to protect consumer interests so maximising customer choice.

  The role of verifying the marketing claims made by competing supply companies will be vital if customers are to have confidence in choosing green supply offerings. We believe that Ofgem have a key role to play in ensuring that any independent bodies who carry out verification services do so on the basis of the guidelines. We do not believe that there is a requirement for an accreditation role, as currently undertaken by Future Energy, as any formal criteria would restrict the scope for suppliers to offer customers innovative products.

  London Electricity is currently conducting research amongst our Green Tariff customers that will include seeking their views on some of the issues raised in your paper. This work has not yet concluded and therefore the results are not included in this response.

Steve Workman

Corporate Responsibility Manager

22 February 2002

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