UK risks missing net zero goals warns Ovo boss, as firm unveils new tariff to fight greenwashing
The UK will miss its net zero goals without bolder action from the government and energy industry to make homes greener and more efficient, warned the boss of big six supplier Ovo Energy.
Raman Bhatia, chief executive of Ovo, has argued suppliers need to encourage customers to improve the energy efficiency of their home, reduce energy usage, and embrace the shift from gas to electricity.
As it stands, 85 per cent of UK households are heated by gas – with the country’s housing stock among the least energy efficient in Europe.
Meanwhile energy firms need to directly contribute to the generation of renewable energy supplies.
The energy boss was speaking at the Tate Modern in London, at an event backed by Friends of the Earth, Cornwall Insight, Ethical Consumer and Energy Saving Trust.
He said: “I am the chief executive of an energy supplier, and I want our customers to use less energy. I want them to pay us less for their heating, lighting, and power each month. And I want us to help get the UK back on track to meet our climate targets, which demand a 78 per cent reduction from 1990 levels by 2035.”
Ovo has also pledged to fight industry greenwashing, and has announced plans to scrap 100 per cent electricity tariffs backed by certificates from next month.
The supplier has called for the industry to scrap the renewable energy guarantees of origin (REGO) scheme.
Its new customer offer, the Path to Zero plan, will not use REGOs and will instead focus on decarbonisation and green technology.
The tariff will come with advice on how to reduce unnecessary energy usage and use energy efficient technology and the choice of one energy-saving product or service every year.
REGO is overseen by Ofgem and aims to provide transparency to consumers about the proportion of electricity that suppliers source from renewable electricity.
Bhatia said: “Greenwashing is a luxury no one can afford. By making this change we’ll save consumers money and reinvest in true green energy, and we hope others will follow our lead.”
Ovo commissioned energy specialist Cornwall Insight to investigate the role of REGOs in the renewable energy system in the UK.
Its findings suggested REGOs provide little to no benefit to renewable energy generation, and will instead soon become a drain on customer finances if their use is continued.
The price of REGOs is starting to rise and nearly £10bn could be spent on them by 2030, Ovo predicts.
Alongside a new tariff, Ovo is pushing for a new kitemark system to identify green packages.
This will help customers avoid greenwashing practices by clearly identifying which tariffs directly support decarbonisation or the generation of renewable energy.
Ovo has faced criticism over its handling of customer bills, with hundreds of energy customers hit with unexpected bills after its smart meters gave defective readings by mistake.
It was also one of three energy firms alongside British Gas and Scottish Power that was collectively responsible for nearly 70 per cent of forced prepayment meters last year – before a government crackdown in February.
Ovo is reportedly interested in taking on Shell’s 1.4m household energy customers, and has made a bid for the company’s domestic supplier arm – having seen Octopus Energy overtake its customer numbers after completing its deal for Bulb Energy last year.