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British Gas launches new green tariff, but how does it compare to other deals?


British Gas has unveiled a new green tariff which it claims is ‘one of the greenest in the market’.

The Big Six supplier introduced its Green Future Plus July 2022 fixed tariff for dual fuel last week with each customer that takes it out supporting the growth of trees in Britain, according to the firm.

Aside from 10 per cent of the gas on the tariff being created from renewable sources, British Gas has also partnered with Climate Care, a company known for its role providing carbon offset services.

British Gas has introduced its Green Future Plus July 2022 fixed tariff for dual fuel customers

British Gas has introduced its Green Future Plus July 2022 fixed tariff for dual fuel customers

However, the tariff may not be as green as others, especially those that are 100 per cent sourced from renewable energy generators.

This is Money takes a look at how the new tariff compares to other green deals – and whether it is actually worth the extra spend.

What green credentials does the tariff have?

All electricity used by customers on this tariff will be matched by buying electricity from renewable sources through Guarantees of Origin certificates, Renewable Gas Guarantees of Origin certificates or both.

This means it is not as green as something that is sourced 100 per cent from renewable energy generators as only some of the electricity comes direct from renewable sources and there is a hefty reliance on buying REGO certificates. 

British Gas has also said that ten per cent of gas on this tariff will be from renewable sources by buying REGO certificates from the Green Gas Certification Scheme.

What is a REGO certificate? 

For every megawatt-hour (MWh) of renewable electricity produced, Ofgem issues one REGO to the generator. These certificates certify that the energy is green.

The Ofgem website states: ‘The purpose of the certificate is to prove to the final customer that a given share of energy was produced from renewable sources.’ 

Whilst this is commendable as not many green tariffs offer renewable gas, this method will still burn gas and create greenhouse gas emissions, whether it comes from biomass or deep under the North Sea. 

British Gas is also partnering with ClimateCare which means that 90 per cent of the gas customers use on this tariff is carbon offset through carbon reduction projects in developing countries.

Another partnership is with the Ecomapua Project, where each customer is helping to protect a hectare of rainforest in the Amazon each year.

Supporting the reforestation projects certainly puts it higher up the planet-friendly table than the cheapest green deals which all rely on buying REGO certificates to account for all of the electricity used.

Dual-fuel customers will also support the growth of up to 10 trees in the UK per household for each year of the tariff.

British Gas has introduced a new green tariff - but it is much pricier than other deals on offer

British Gas has introduced a new green tariff – but it is much pricier than other deals on offer

Dave Kirwan, managing director of UK home at Centrica said: ‘Customers who choose this tariff will have peace of mind that they are making a positive contribution towards tackling climate change.

‘We want to offer our customers different types of tariffs that suit their individual needs and for some that means knowing their energy is from environmentally friendly sources.

‘As well as providing ways for people to consume greener energy, we’ve led the way in electric vehicle charging, distributed energy solutions and we are committed to helping our customers reduce their emissions.’

How much will it cost?

The new tariff comes in at average of £1,237 which is at the very top end of energy prices and well over the current price cap limit of £1,179.

British Gas claims there is a ‘slight premium’ to account for the costs of providing green energy, however, there are multiple other green tariffs that are much cheaper.

One reason British Gas are likely to say the high price is to account for the ‘premium’ of being a green tariff is because they don’t know what wholesale prices will be in two years’ time, which is why lost long term fixes are generally more expensive.

Who is it available for?

This tariff is available for both new and existing British Gas customers who are paying by direct debit, cash, cheque or card.   

Is it actually greener than other deals? 

Whilst the tariff promises to be one of the greenest available, experts say it is not the most environmentally friendly around.  

Rik Smith, energy expert at uSwitch, said: ‘This deal ranks somewhere around mid-table in terms of environmental credentials, combining a small amount of gas from renewable sources with electricity which comes from both renewable and traditional generation. 

‘Like many tariffs marketed as green, it also uses certificates to match any electricity that has come from gas, coal, or nuclear. 

‘What sets it slightly apart from other tariffs using this mix, though, is that it also supports tree planting and protecting the Amazon rainforest. 

‘Long term fixed plans tend to be more expensive however, and there are similar deals available for around £200 less. 

‘For anyone looking to help the environment by switching their energy deal, it’s best to shop around first to see what’s on offer.’

What are other companies offering?

The cheapest green tariff currently on the market comes from People’s Energy, which was recently named as one of the best suppliers by Which?.

The People’s Energy 2 Months Upfront Winter 20 fixed tariff comes in at an average of £828 a year – £409 cheaper than British Gas’ newest offering. 

However, it does come with a £60 exit fee for those looking to leave before the years term is up. 

Outfox the Market is the next cheapest coming just below at £829 a year on their Fix’D 20 2.0 tariff. 

Npower is the only Big Six supplier that features on the list with their npower Select uSwitch Exclusive v36 tariff, costing £879 a year. 

Customers looking for a better deal can use price comparison websites to see if switching to another supplier or tariff could save them money.

This is Money has its own comparison service which can help our readers save hundreds of pounds on their bills. 

You can also visit each energy supplier website from the table below to establish how green each tariff mentioned is.  

TOP TEN GREEN TARIFFS CURRENTLY ON THE MARKET 
Supplier Plan name Tariff type End date Exit fee? (£) Average price (£)
People’s Energy People’s Energy 2 Months Upfront Winter 20 Tariff fixed 12m 60 828
Outfox the Market Fix’D 20 2.0 fixed 12m 0 829
Gulf Gas and Power Gulf Home Renewable 12 February 21 v1 fixed 28/02/2021 60 831
Yorkshire Energy Green Swaledale – Fixed until 28th February 2021 fixed 28/02/2021 60 854
Green Oak variable 0 867
npower Select npower Select uSwitch Exclusive v36 fixed 12m 60 879
Tonik Energy Go Green Exclusive v3 fixed 12m 0 880
So Energy So Alder – Green fixed 12m 10 882
Octopus Energy uSwitch Octopus 12M Fixed fixed 12m 0 884
GOTO.Energy In Control Green Jan 2021 V6 fixed 12m 70 884
Source: uSwitch (prices correct as of 24 January 2020)         

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