We’ve updated our fuel mix. What does that mean?

Posted in: Energy

Posted on: 30.08.2018

The eagle eyed among you will have noticed that we recently updated our fuel mix.

Our fuel mix shows the sources of the energy that we purchase for customers. All energy suppliers have to publish a fuel mix disclosure for a full year and report it on an annual basis (for April 1 to March 31) to the regulator, Ofgem.

The reason suppliers are required to report their fuel mix is so that customers are able to make informed choices about where they get their energy from.

It’s a simple thing, but also an important one. Which is why we thought we’d take this opportunity to explain a bit about what’s changed and what it all means.

What exactly are we reporting?

All energy suppliers have to purchase a sufficient amount of electricity to cover what their customers use. This all goes into the National Grid, which is what homes and businesses are connected to, ensuring everyone’s lights switch on and kettles boil.

There are numerous ways of purchasing that electricity, and suppliers like ourselves have expert trading teams who do that job.

This includes making sure we’re well ‘hedged’. Which means essentially the same as it does in financial investment — reducing risk of being caught short or of falling foul of adverse price movements. Getting this wrong, and not matching demand with supply — particularly when markets are volatile — can be very bad news for supplier and customer, resulting in collapsed suppliers as we’ve seen recently.

It also includes choosing which sources to purchase from. The simplest — and normally cheapest — route is to buy from the wholesale energy market. And, of course, ‘wholesale’ is not clean energy. It’s made up of everything feeding into the UK grid — the biggest contributor being gas, with nuclear and coal also going in alongside renewables.

Which is why we buy our electricity directly from our community of over 1,400 renewable generators.

The way we report that renewable supply to Ofgem, is with ‘Renewable Energy Guarantee of Origin’ (REGO) certificates. Which is where it gets a bit tricky.

Our REGO certificates come with the power we purchase from our generators — as they should, being like a receipt. But you can purchase REGO certificates for a very small sum (a few pence), without actually purchasing the power they relate to. This allows suppliers to ‘greenwash’ their supply, or at least portions of their supply, reporting dirty energy from the wholesale market as ‘green’.

We’ve got a whole blog series on this topic if you want to know more, and our friends renewable energy not-for-profit experts Regen have also written about it recently.

What's changed between 2016/17 and 2017/18?

The short answer is… not much.

Wind continues to make up the majority of our fuel mix. If you live in the UK, you might have noticed that we get a lot of wind in the UK, which means that it is a reliable and low cost energy source for us. 

However, the wind does not always blow, which is part of the reason why our biogen percentage has increased slightly. Biogen does not rely on weather patterns like wind and solar, meaning it performs an important role in providing stability against these more variable sources.

Hydro performs a similar role, whilst solar continues to be cheap and abundant — especially during the hot summer we have had this year. It has dropped as a percentage of our overall fuel mix more due to the increased introduction of other sources than a deliberate reduction.

A comparison of our 2016/17 fuel mix and our 2017/18 fuel mix

If you want to know more information, such as how our mix compares to the UK average, or how our green gas factors in, check out our fuel mix page.

And if you’re not currently a Good Energy customer, we urge you to check out your supplier’s fuel mix, including whether their ‘renewable’ portion is truly renewable, or just greenwash.

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