UK Government to investigate electricity deals that may not be as 'green' as they claim

The review comes after a poll showed 75% of consumers believe suppliers should be more transparent over their green tariffs.

Consumer protection advocates and price comparison services have also called for greater transparency around suppliers who market their tariffs as green (Image: PA)

The UK Government is set to review electricity tariffs that claim to be "green" over concerns some energy firms could be exaggerating their environmental benefits.

Energy minister Anne-Marie Trevelyan said nine million households across the UK are on tariffs branded "100% renewable" or "green". But industry figures have warned that the claims may be misleading and are calling for changes to rules over the labelling.

Energy companies are currently able to market tariffs as "green" even if some of the energy they supply to customers comes from fossil fuels. They do this by purchasing Renewable Energy Guarantees of Origin certificates to offset the use of fossil fuels, with each certificate guaranteeing a similar amount of green energy is produced.

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But energy companies are not compelled to reveal how much of their energy is based on the purchase of certificates against those supplying electricity directly from renewable sources, such as wind farms.

Options being explored include looking at whether the system around these certificates needs to be smarter, as well as whether suppliers need to provide clearer information to householders about their green tariffs.

MoneySavingExpert.com is currently reviewing how they rank suppliers that offer such tariffs given the concerns raised as “this is not the first time such worries have been aired”.

The UK Government is also planning to investigate third-party intermediaries in the retail energy market, including price comparison sites, auto-switching services and non-domestic brokers, after figures showed about half of households now use them when engaging with the energy market.

They currently operate outside of retail market rules, and ministers will seek views on whether a regulatory framework is needed.

Ms Trevelyan said: "Millions of UK households are choosing to make the green switch and more of our energy comes from renewables. But I want people to know that when they sign up to a green tariff, they are investing in companies that make a conscious choice to invest in renewable energy. Part of that is ensuring companies are being as transparent as possible on where their power comes from."

According to a recent YouGov poll for Scottish Power and Good Energy, nearly two thirds of UK energy consumers say their purchasing decisions are influenced by how eco-friendly an energy tariff is.

However, three quarters believe suppliers should be open and transparent about their tariffs, including how much of their renewable energy they buy from other companies

Consumer protection advocates and price comparison services have also called for greater transparency around suppliers who market their tariffs as green.