Advertisment
Advertising on the “Why Energia” webpage stated:
“Supplying 100% green electricity.
We work towards creating a sustainable future that we can all be proud of. We operate one of Ireland’s biggest wind farms and provide 100% green electricity to all our customers.”
Advertising on the “Ireland’s Greenest Electricity” webpage stated:
“The power behind Ireland’s greenest electricity
Energia Group is proud to be the longest supplier of 100% green electricity on the Island of Ireland.
How can we confidently stand by our green credentials?
Click here to review the latest CRU Fuel Supplier Mix Report for statistics and information.”
The page included “Green facts about Energia”:
“100% Renewable & Greenest Electricity Provider for Longest
Energia is proud to have supplied 100% renewable electricity in Ireland for the longest period of time. These figures can be reviewed in the CRU’s Fuel Mix Reports for 2014 – 2021”
Complaint
The complainant considered that the claim to provide 100% green electricity to customers was misleading as they were aware that the company operated a gas-powered plant which provided energy to the grid and that it was from the grid that customers were provided with their electricity. In the circumstances, they considered that the electricity provided to customers was made up of both non-renewable and green energy.
Response
The advertisers stated that the Commission for Regulation of Utilities (CRU) regulatory regime placed specific obligations on energy suppliers in regard to the marketing and verification of green energy products and said that their advertising was in compliance with those requirements. They said that the CRU administered the Fuel Mix Disclosure and Green Source verification process every year on the basis of fuel mix and CO2 emissions data received from the Single Electricity Market Operator (SEMO) *1 . They referred to information on the CRU’s website *2 which 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”.
They also said that the supplier handbook *3 established by the CRU outlined specific regulatory requirements for energy suppliers in relation to Marketing and Advertising amongst other regulatory requirements, referring specifically to section 2.5.10 which they considered was noteworthy as it stated:
“Where a supplier offers a ‘green tariff’ the supplier must set out the credentials of the tariff”.
The advertisers said that for regulated energy suppliers 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 provided a screenshot of the latest Fuel Mix Disclosure report which showed that their fuel mix was 100% renewable or green, therefore, justifying their claim to be supplying 100% green energy.
They also said that the wholesale power market in Ireland worked on the basis that electricity generators supply the electricity to a central pool and electricity suppliers purchase 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 supply and generate electricity from purchasing electricity directly from among their generation fleet. As the pool was blind, they said that the only means of verifying the amount of renewable electricity sent to the pool was via guarantees of origin (GoOs) and that 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 Guarantees of Origins to match the quantity of electricity they have supplied to their customers, otherwise they could not claim the electricity they have supplied is entirely from renewable sources.
They also advised that electricity in Ireland could also be imported and exported overseas via the interconnectors to Britain and that Britain in turn was connected to the power markets of the rest of Europe, meaning that electricity could flow from other European member states to and from Ireland. Therefore, Guarantees of Origin could be traded across Europe and must be accepted in all member states in accordance with European competition law.
In the light of the above, they believed that they satisfied the relevant sections within the ASAI Code.
*1 https://www.sem-o.com/about/
*2 https://www.cru.ie/document_group/fuel-mix-and-co2-emissions-disclosure-2/
*3 https://www.cru.ie/wp-content/uploads/2022/06/CRU202249-Electricity-and-Gas-Suppliers-Handbook-2022.pdf
FURTHER INFORMATION:
The 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*4) 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*5
• CRU’s “Supervisory Framework for Administration of Guarantees of Origin*6
• CRU’s annual Fuel Mix Disclosure publications*7
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.
*4 https://www.sem-o.com/about/
*5 https://www.cru.ie/wp-content/uploads/2015/07/CER15205-Green-Source-Products-Decision-Paper.pdf
*6 https://www.cru.ie/wp-content/uploads/2011/07/cer11824.pdf
*7 https://www.cru.ie/document_group/fuel-mix-and-co2-emissions-disclosure-2/
Conclusion
Statement:
The Complaints Committee considered the detail of the complaint and the advertisers’ response together with the statement from the CRU.
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.
“The Committee noted the advertising claim stated, “and provide 100% green electricity to all our customers.”
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 this case, the Committee noted that the claim in the advertisement was not claiming that 100% green energy was being provided to end user’s premises and given that both EU and national legislation permits the use of Guarantees of Origin, they determined that concluding the case by way of the foregoing statement was appropriate and warranted given the complexities of the background context.
ACTION REQUIRED:
No further action in this case. The Committee noted that the ASAI and the CRU were addressing the requirement for guidance in the area.
