Household

Advertising on a search engine website stated:

“Energia’s Cheapest Electricity / 100% Renewable Electricity
Get 100% Green Energy to Your Home & Save 41%. Switch to Energia for the Best Deal Now. Every Month Over 5,000 people Switch & Save on their Home Energy. Join Energia Today! No Hidden Fees. No Deposit Required. Online Account Management.”

The complainant objected to the advertisement on the following grounds:

Issue 1:
The complainant considered that the claim “100% Green Energy to Your Home” was misleading as they considered that a consumer would reasonably assume that the claim meant that no “dirty” (fossil fuels) fuels were used in generating the electricity sold to the consumer and was instead generated with “green” (renewable) sources. They said that, assuming the advertisers adhered to the relevant regulations, the electricity provided was generated using fossil fuels which were offset (or greenwashed) using Guarantees of Origin.

The complainant said that Guarantees of Origin were not electricity, they were a contract entitling a supplier to the ‘greenness’ of electricity, not electricity per se. They said that the Guarantees of Origins that were imported were traded completely independently of electricity (e.g. the electricity is sold in Norway but the greenness is sold in Ireland), therefore, when a supplier bought a Guarantee of Origin, they were not buying ‘green electricity’ but the ‘greenness of electricity’, the difference of which was subtle but crucial. They said that therefore when the advertisers were selling electricity, they were not selling ‘green electricity’ but the ‘greenness of electricity’ and this had not been reflected in their advertising.

The complainant said that the advertisers were selling electricity from the pooled market, therefore, the electricity was not 100% green and had a fuel mix comprised of coal, peat, gas, and oil as well as renewables, and so was not 100% green. They said that a consumer trying to avoid fossil fuel generated electricity might opt to purchase “100% green” electricity, however, “100% green electricity” could be sourced from fossil fuels in part or in whole so long as there were enough Guarantees of Origin to offset the volume of electricity. However, without qualification of the “100% green” claim, there was no way for a consumer to know what energy was genuinely 100% green and what was only 100% green after it has been greenwashed using guarantees of origin.

They said that rather than 100% green energy, the consumer received a product made up of a percentage of green electricity the supplier purchased on the wholesale electricity market, a percentage of ‘dirty’ electricity the supplier purchased on the wholesale electricity market, and Guarantees of Origin, electronic documents that proved a quantity of electricity originated from a specific renewable energy source, in sufficient quantity to equal the amount of energy from dirty fuels, which were purchased in a separate non- electricity market.




Issue 2:
The complainant considered that the advertising was misleading as it omitted the fact that the electricity was generated with fossil fuels that were offset with Guarantees of Origin.

Issue 3:
The complainant objected to the claim “100% Green” on the grounds that it was an absolute claim that could not be substantiated that it would cause no environmental damage.

The complainant said that energy supplied using fossil fuels produced greenhouse gas emissions that contributed to climate change and a medley of other pollutants that negatively impacted on air and water quality. They said that burning fossil fuels to generate electricity even when it was offset using guarantees of origin did not “cause no environmental damage”. If the energy supplied to the consumer was generated with even a small amount of fossil fuels, they believed that it caused environmental damage, and without qualification, the supplier was in breach of the code.

Issue 4:
The complainant considered that the claim “to Your Home” was misleading on the grounds that if a supplier was selling ‘dirty’ electricity to the consumer and offsetting it with Guarantees of Origin purchased elsewhere, then the “to Your Home” part was misleading. They said that Guarantees of Origin were not energy, they were electronic certificates and accounting instruments and that according to the Commission for Regulation of Utilities (CRU) Fuel Mix Disclosure*1, the Guarantees of Origin did not need to follow the physical flow of electricity. As a consequence of this, they said that it was not possible to constitute green energy to a home. The complainant also stated that the CRU Fuel Mix Disclosure also advised that Guarantees of Origin were imported into Ireland from Greece, Belgium, Spain, Italy and Norway, all countries where it was physically impossible to send a physical flow of electricity to a supplier in Ireland owing to the lack of direct interconnection infrastructure. Therefore, if the advertisers Guarantees of Origins were sourced from any of those countries, it would not be possible for them to claim that a consumer could get green energy to their home.

*1 https://www.cru.ie/document_group/fuel-mix-and-co2-emissions-disclosure-2/

The advertisers responded to the complaints as follows:

Issue 1:
The advertisers drew attention to two aspects of the CRU’s regulatory regime that placed specific obligations on energy suppliers in relation to the marketing and verification of green energy products. They said that the advertisement did not represent an unfair claim as it was in compliance with the relevant regulatory requirements for green product advertisements.

The advertisers said that the first aspect of the specific regulatory requirements for energy suppliers emanated from the CRU’s Electricity and Gas Suppliers’ Handbook (2), specifically, Section 2.5 which prescribed a list of information suppliers were required to present when marketing/advertising their tariffs to customers.
2.5.10 in particular reads as follows:

“Where a supplier offers a ‘green tariff’ the supplier must set out the credentials of the tariff. For example, explain how the tariff is green and differs from their other tariffs.”

The advertisers said that the obligation on suppliers was therefore to demonstrate the “greenness of their tariff” on the advertisement itself in the case of television and visual advertisements, as per 2.3.1 of the handbook, or through the use of dynamic or clickable links in the case of digital marketing advertisements per the requirements of 2.3.2 of the Handbook. They said that their advertisement, a digital marketing advertisement, was a google advert and thus the requirements of 2.3.2 applied in this instance.

The advertisers said that the second aspect of the CRU’s regulatory regime relevant to green energy claims was the Fuel Mix disclosure and Green Source verification process. They said that the CRU administered the Fuel Mix Disclosure and Green Source Product Verification Process each year on the basis of fuel mix and CO2 emissions data received from the Single Electricity Market Operator (SEMO) and that the CRU described the Fuel Mix Disclosure calculation as:

“the only way of independently verifying the source of electricity that suppliers claim to provide to their consumers”

The advertisers said that for regulated energy suppliers such as Energia, this meant that the Fuel Mix Disclosure process could be used as justification of “credentials” specified in section 2.5.10 of whether a supplier’s energy offer was green or not. They referred to the latest Fuel Mix report which listed their fuel mix as 100% renewable or green, therefore, justifying their claim to be supplying 100% green energy to their customers’ homes.

Issue 2:
The advertisers said that the advertisement was in compliance with the CRU’s regulatory requirements for green product advertisements.

The advertisers said that the wholesale power market in Ireland worked on the basis that electricity generators supplied the electricity to a central pool and electricity suppliers purchased their customer’s electricity requirement from this pool blindly (i.e. they do not know which generating station the power came from). They said that this prevented companies which both supplied and generated electricity from purchasing electricity directly from among their generation fleet. They said that because the pool was blind, the only means of verifying the amount of renewable electricity sent to the pool was via guarantees of origin (GoOs) and this was the reason why the Fuel Mix Disclosure was the only means of verifying a supplier’s fuel mix, as the supplier must present enough GoOs to match the quantity of electricity they have supplied to their customers, otherwise they cannot claim the electricity they have supplied was entirely from renewable sources.

Issue 3:
The advertisers said that the advertisement was in compliance with the CRU’s regulatory requirements for green product advertisements and they referred to the Fuel Mix Disclosure process which could be used as justification of “credentials” specified in section 2.5.10 as to whether a supplier’s energy offer was green or not. The advertisers again referred to the latest Fuel Mix report which listed their fuel mix as 100% renewable or green, therefore, they considered that it had justified their claim to supply 100% green energy to their customers’ homes.



Issue 4:
The advertisers referred to the CRU’s Fuel Mix disclosure and Green Source verification process, which was described by the CRU as the only way of independently verifying the source of electricity that suppliers claim to provide to their consumers and as their fuel mix was listed as 100% renewable or green on the latest Fuel Mix Disclosure, therefore, their claim to be supplying 100% green energy to their customers’ homes was justified.

(2) https://www.cru.ie/wp-content/uploads/2019/11/CRU19138-Electricity-and-Gas-Suppliers-Handbook-2019-.pdf

FURTHER INFORMATION:
The ASAI Executive sought a view from the Commission for the Regulation of Utilities (CRU) on the claim “100% Green Energy” when energy provided to consumers came from a pooled grid that included both renewable and non-renewable energy. The CRU provided a statement in response.

They stated that EU Renewables Directive and Irish legislation allowed the use of guarantees of origin (GOs) for fuel mix disclosure for the purposes of demonstrating to final customers the share or quantity of energy from renewable sources in an electricity supplier’s energy mix and in the electricity supplied to consumers.



They said that they recognised the importance of maintaining confidence in the Guarantees of Origin process, and rigorously oversaw the application of the CRU’s verification process and reporting of this data in line with EU legislation to ensure the validity and accuracy of what information consumers receive.

The said that they published Fuel Mix Disclosure information every year to provide consumers with the information necessary to distinguish between electricity supply companies based on their individual fuel mix and emissions associated with their supplied electricity and it was the method of independently verifying the source of electricity that suppliers claim to provide to their consumers.

They said that all suppliers with retail customers were required to submit a fuel mix declaration to SEMO (Single Electricity Market Operator*3) so that a representative fuel mix could be calculated and disclosed and that suppliers were also obliged under the terms of their licenses to present Fuel Mix Disclosure data on their bills and promotional materials.

The CRU said that the Renewables Directive was explicit in restricting the double- counting of GOs and a given GO could only be used once and any one MWh of renewable energy produced could only be issued as one GO certificate.

They said that the SEMO issued and cancelled GOs in accordance with the CRU’s “Supervisory Framework for Administration of Guarantees of Origin” and that the GO certificates were precisely defined tracking instruments of the European Commission and were only traded between European countries, and solely accounted for through a European trading hub (i.e., the Association of Issuing Bodies). They said that imported GOs must adhere to EU-wide standards as set by this hub, which tracked certificates traded between countries, ensuring that double-counting did not take place.

They said that suppliers’ fuel mix information referred not only to green electricity physically produced in Ireland, but also to the verified green electricity that could be sourced from other European countries through Guarantee of Origin (GO) Certificates. They said that Irish electricity suppliers could purchase GOs to use as proof of the share or quantity of their energy demand from renewable sources in Europe and allowed suppliers to purchase the renewable benefit of certain generators across Europe and include it in their total fuel mix. They said that this meant that the fuel mix shown by suppliers could have a higher percentage share of renewable energy sources than existed in the actual physical generation distributed to end customers via the grid in Ireland.

They said that they considered that the supervisory framework and the CRU’s verification process for green products were robust enough to provide adequate assurances of the validity of Guarantees of Origin and reliable fuel mix disclosures by suppliers for their electricity customers. Finally, they provided links to the following documents:
• CRU’s verification process for green products*4
• CRU’s “Supervisory Framework for Administration of Guarantees of Origin*5
• CRU’s annual Fuel Mix Disclosure publications*6

Following further consultation by the ASAI Executive, the CRU said that the current disclosure of the consumed product mix and supplier fuel mix is slightly confusing to the end electricity consumers in Ireland and that they recognised that the increased information would be beneficial to customers. On foot of a proposal by the ASAI Executive to explore developing advertising guidance in this area, they indicated that they would be happy to engage with the ASAI and the utility providers on the ASAI Executive’s initiative.

*3 https://www.sem-o.com/about/

*4 https://www.cru.ie/wp-content/uploads/2015/07/CER15205-Green-Source-Products-Decision-Paper.pdf

*5 https://www.cru.ie/wp-content/uploads/2011/07/cer11824.pdf

*6 https://www.cru.ie/document_group/fuel-mix-and-co2-emissions-disclosure-2/

The Complaints Committee considered the detail of the complaint and the advertisers’ response.

The Complaints Committee were aware of the importance for society of the climate change agenda, including the switch from fossil fuel to renewables. They generally understood that there was one electricity grid in Ireland into which generated electricity was transmitted for distribution to end users. Further, electricity generated by different means was not differentiated once it was transmitted to the grid, i.e., it is then a homogenous product.

Issues 1, 2 and 3 – Statement:
The Complaints Committee noted the information on the construction/workings of the Single Electricity Market. They also noted the EU and national legislation in place underpinning the market. They considered that information for consumers could be improved, and that significant care was needed in the creation of advertising messages so as not to exaggerate what could be delivered to individual premises. The Committee considered that there would be significant benefit for consumers were guidance to be developed for the energy utilities on advertising claims and welcomed that the ASAI and the CRU would be addressing this matter.

In the circumstances, the Committee determined that concluding the case raised in Issues 1, 2 and 3 by way of the foregoing statement was appropriate and warranted, given the complexities of the background context.

Issue 4 – Complaint Upheld:
The Committee noted that the advertising claim included the phrase ‘to your home, the full claim being “Get 100% Green Energy to Your Home & Save 41%”. They also noted that electricity which was provided to end users from the national grid was comprised of electricity generated from a mix of fuel sources, both non-renewable sources and renewable energy. They considered that these objective factors were incompatible with advertising claims that the electricity delivered to end users’ homes was “100% green energy”. In the circumstances, the Committee considered the advertising claim to be in breach of Sections 4.1, 4.4, 4.9 and 4.10, 15.2 and 15.5 of the Code.

ACTION REQUIRED:
The advertising claim at Issue 4 must not reappear in its current form again.

The Committee noted that the ASAI and the CRU were addressing the requirement for guidance in the area.