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Ofgem Grants Green Energy Suppliers Temporary Price Cap Derogation

renewable wind energy

Ofgem has granted temporary exemption to a group of energy firms from the imposed limits on standard variable tariffs (SVTs) which came into effect at the beginning of 2019.

The three companies, Good Energy, Ecotricity, and Green Energy UK, will be permitted to charge rates above the recently introduced price cap.

The derogations will remain until 31st March 2019 unless Ofgem chooses to revoke or amend them before then. The regulator is asking the companies to submit evidence in order to for them to receive a permanent exemption from the price caps.

Another temporary exemption was given to energy firm Pure Planet for “alternative compliance assessment for the default tariff price cap”.

This was due to Ofgem’s assessment that the price caps would “not have been in the best interest of most of its consumers” as Pure Planet has a non-standard charging structure.

Pure Planet’s derogation will remain until 31st December unless Ofgem decides to step in and revoke or amend it.

Co-founder of Pure Planet, Steven Day, welcomed the exemption, but explained that it was in no way a sign that they would end up overcharging their customers. He said: ”Pure Planet’s transparent and great value tariff complies with the cap; our members will never end up paying more. And they get clean renewable electricity and carbon offset gas”.

Day also explained that other green suppliers had not applied for a derogation: “Only some green suppliers have applied for the derogation – which means their customers will potentially pay more than the cap – but not all renewable suppliers have done so. Pure Planet, and some other non-derogated green suppliers, shows that it’s feasible to offer green power for less than the cap”.

Juliet Davenport, founder and chief executive of Good Energy, made a statement explaining their need to charge customers slightly more in order to make long-term green energy feasible in Britain: “if Britain is to kick its fossil fuel habit, long-term investment in renewable energy is required; Ofgem has recognised that Good Energy is distinct from other suppliers in providing that investment. Derogation means we can continue paying generators a good price, establishing a clean energy marketplace”

Green Energy UK’s managing director, Doug Stewart, echoed the sentiment, also going on to explain that the granting of the derogations was confirmation that Ofgem understood the “true cost” of supplying green energy. He said: “it is interesting that the three longest standing independent suppliers, which also happen to be green, all sought and obtained a derogation from the price cap. This indicates that both they and Ofgem recognise the true cost of supplying future energy”

He further elaborated that it was important to give consumers the option of supporting causes they believe in: “the support of generation of green electricity and gas outside the mandatory schemes is a real expense, but also a choice that should not be denied to those consumers with green agendas.”

Harry Pererra
Harry Pererra

Harry turns on his experience in journalism and programming to write about the latest news in the world of tech and the environemtn. When he isn’t writing for usave he is working towards his Blue Belt in Brazilian Jiu Jitsu, and prefers dogs to cats.

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