Hello, I'm looking to reduce my environmental footprint and have looked into switching to a green (i.e. renewable) energy tariff. However, reading about the economics of the electricity market has led me to think that doing this will not help green energy investment. I'd be interested in knowing if anybody else here has thought about this, and whether anyone can see a mistake in my way of thinking.
As I understand it, investment in renewables is being encouraged by the government by forcing electricity suppliers to submit to them a certain number of Renewables Obligations Certificates (ROCs) each year, set in proportion to the amount of electricity they have sold, and setting a financial penalty for those that do not. Suppliers that have bought more than their obligation of renewable energy can sell their ROCs to suppliers that have not. Green energy companies like Good Energy, Ecotricity etc. do sell their excess ROCs to other suppliers, giving them a "license to pollute", as else their prices would be too high. This means that other suppliers need to buy less renewable electricity, roughly cancelling the effect of buying electricity from green energy companies, so that purchasing energy from those companies does not seem likely to substantially increase funds going to renewable energy generators. Ecotricity does invest substantial sums in building new wind turbines, but who can say whether those turbines would not have been built by another company anyway, given that turbines are profitable investments? Any thoughts?
