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Companies need to take a lot of care when making Green claims. The whole Green energy space is massively complex and it is surprisingly easy to leave yourself open to claims of Greenwashing.
What do I mean?
Well, take the Irish energy sector, for example. Anyone who generates electricity in Ireland, which is to be distributed on the grid, is required to sell that power into the wholesale pool – the Single Energy Market (SEM).
Then any retailer who wishes to sell that power to businesses or residential customers, buys the electricity from the pool and sells to their customer base.
Now if you are grid connected in Ireland for your electricity supply (as most organisations are) you get your power from this pool.
Can you see where I am going with this?
Most electricity companies in Ireland do generation as well as retail. Some of them have a significant portfolio of renewable resources (chiefly wind). However, because of the structure of the market, they can’t sell this power directly to consumers, it has to go to the SEM pool first.
When the electricity retailers sell electricity, they have to purchase it from the SEM pool to sell to their customers. Because all electricity sold in Ireland comes from the same SEM pool, everyone has the same percentage of renewables in their supply (unless they have a private supply).
What this means in effect is that you can’t selectively buy renewable electricity in Ireland.
If you see companies saying that their Irish operations are “running on almost 90 percent wind power”, for example, they are either ill-informed, or they are Greenwashing.
If you can’t selectively purchase renewable electricity, what can you do to reduce the carbon footprint of your energy consumption?
Well, the best thing to do then would be to move your loads to times when the percentage of renewable sources in the pool is highest! Any company committing to doing that would be making a bona fide Green statement.
Mark Cathcart says
Tom, could you be a little more specific about how these claims come about and how the problems arise?
How does a company get to claim 90% of THEIR energy comes from wind power? Do they fund find windmill/solar farms?
Does the total amount of claims from industry to be from renewal exceed the capacity ?
I”m sure all this is obvious to you, but to someone who takes a his companies claims at face value but would like to make sure they are not Greenwashing. Happy to read up if there are good links to follow…
Tom Raftery says
Thanks for stopping by to leave a comment.
Companies who make claims like that (and I was quoting from a press release) do so because they purchase their electricity from a supplier who only generates renewable energy (the implication being that the supplier thus supplier only renewable energy – whereas the reality, which not many people are aware of, is that the supplier has to buy from the pool).
It is hard to know if the total amount of claims exceeds the capacity as I am not sure anyone has totted them up anywhere.
I don’t want to link to any companies who have made these claims (to protect the innocent – I don’t think the claims were made knowing the situation in the Irish energy market) but a quick Google search would turn up a few for you!
Mark Cathcart says
So, again maybe this has been suggested and dismissed as too obvious. But isn’t this an ideal candidate for a long tail effort?
Create a web site that can log all such claims, provide estimates of power usage, and then origin of supply. Surely within a few months it would be simple to sum up such claim and challenge companies making said claims could be challenged to provide a more in depth and supportable claim. So, in so much as company-x claims they get 90% of their energy from pool-y and so do n-other companies. Then it would straight forward to prove the pool-y doesn’t receive enough sustainable energy…
In fact, we could even demand companies making such claims register their data, supplier, type of energy, grid supplier, annual energy consumption etc. and then they could give themselves an “tracked by greenenergy” certification or somesuch.
In general until we call their bluff, nothing will change. Again, am I missing something? I often wondered how companies came to such claims.
Jerry Sweeney says
Hi Mark, Tom is also involved with a data centre here in Ireland (www.cix.ie) that I am responsible for purchasing the power for. I personally have a strong opinion on this topic.
At CIX, we have a policy of buying power directly from the wholesale pool and doing what we can to avoid peaks. For example we do our diesel generator load tests as predicted peak times so we exit the market. Peak prices occur when demand and supply are out of sync so we help the market by doing this (and we save money too). There is a growing correlation between wholesale prices and renewables availability. Our behaviour helps to put a floor on the trough price and therefore helps renewable penetration onto the Irish grid.
Ireland has around 12% renewable penetration currently. Our electricity bill every month states that we consume around 3% renewables. That’s only a quarter of the national average.
If you visit
you will see that HP, in Ireland, claim to be using nearly 90% renewable energy. And, I am sure that their bill states this and I am sure that that bill is fully compliant with the regulations regarding the stating of same.
I understand that HP purchase their electricity from Airtricity, a fantastic company that have made huge investments in wind energy generation in Ireland.
There are two sides to Airtricity. One, they generate electricity based on variable weather patterns and sell it into the wholesale pool. Great!
Two, they buy electricity from the wholesale pool and sell it to companies like HP. Obviously they buy it for resale when HP need it, not when the wind is blowing. HP are allowed to claim this high renewable rate because they buy from a company that generates renewable energy but not necessarily the same energy from a time perspective, if you can see what I mean.
Here’s my problem. Nowhere in HPs literature do they say they do anything to align their demand with renewable energy availability. We, at CIX, do a lot to align our remand with renewable availability. HP claim nearly 90% renewables and we are told we are only using 3%. Which one of us is doing more to assist renewable penetration in Ireland? We think we are. Airtricty, on HPs behalf, are selling ‘clean’ energy to the grid when they have too much and buying back ‘dirty’ energy when they need to. If no attempt is made to align usage with generation then there is no net attempt to increase possible renewable penetration onto the Irish grid.
I know this is a complicated debate and it is possible to take more than one position. It is possible to argue that paying Airtricity a little extra for the right to claim near 90% clean energy is a good thing. But, I think we need our markets to reward actual behaviour that assists in solving the problem rather than allowing those with deep pockets appear to be doing good. Are HP buying a licence to sin or are they helping the environment?
Bob "Oil and Energy" Jameson says
I really appreciate great ideas and thoughtful editorial content. When it comes to this industry so much is compiled of fluff and nonsense and I really appreciate how you guys share the real deal and don’t lead your readers astray from the facts. Thanks for your great work and I’ll continue to be an avid follower for many years to come!
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