A Very Green Dilemma…

People often tell me that they care about the environment, and that they would happily switch to renewable energy sources if they could. What these people don’t realise is that there is an option actually already out there for them:

Ecotricity claims to be Britain’s first ever green energy company. Founded in 1996 by Dale Vince, the organisation provides electricity and gas to 67, 974 customers (as of 25/11/2012) through its 53 windmills and one solar farm (Ecotricity, 2012). Ecotricity have no shareholders or investors and therefore have no financial obligations to meet after their costs have been paid. The company use this opportunity to pump all their profits into developing, enhancing and extending their green energy initatives.

First things first – is the energy they supply totally green?

No, but they do appear to be totally honest.

Let’s use the example of electricity. Ecotricity’s electricity is sourced from its own windmills but is, “topped up with ‘brown’ electricity” which is bought from the wholesale market (Ecotricity, 2012). Ecotricity say the amount of brown electricity reduces each year as they build more of their own green (This is Money, 2012). The graph below depicts how much green and brown electricity makes up Ecotricity’s electricity. Green electricity means it comes from renewable sources such as the wind, sun or sea whereas brown electricity means it comes from non-renewable sources such as coal, nuclear or gas.

As you can see, Ecotricity currently provide electricity where 64.3% of it is produced from renewable sources (Ecotricity, 2012).  This is very impressive, especially when you bear in mind that only 9.6% of the average UK electricity is made up of green electricity (DECC, 2012). You can also see from the graph that they want 70% of their electricity to be produced by renewable sources by 2013.

However, what’s really worth noting is that because of their non-profit business model, when more and more people switch to Ecotricity the company will have more money to invest in their green initiatives which will allow them to eventually provide fully green energy.

Customer Service

Ecotricity are not only the leading supplier of renewable energy in the United Kingdom, they are also highly acclaimed for their customer service. Earlier this year (2012), the Office of the Gas and Electricity Markets found that Ecotricity received the least complaints out of all British energy providers. The worst offender was British Gas, followed closely by nPower then EDF.

Other Projects

Forest Green Rovers

In 2010 Ecotricity founder, Dale Vince, became the Chairman of the Gloucestershire based football club, Forest Green Rovers (BBC Sport, 2012). Vince became involved with the club at a time when they were in financial difficulty and he became the majority shareholder in order to give the club the monetary backing it needed to survive (ibid). Since then Vince has set out the aim of making Forest Green Rovers the first ever truly sustainable football club (Forest Green Rovers, 2012).

Vince and Ecotricity are steadily working towards this ambition by introducing some unique initatives at the club. For example, Forest Green Rovers now treat the pitch using cow manure; this has resulted in the club now playing on the world’s first ever organic football pitch (BBC Sport, 2012).

Ecotricity have also installed 180 solar panels at the stadium which generate 10% of the total electricity used there. Finally, Vince has placed a red meat ban on all of his Forest Green players as well as stopping any red meat products being sold at the game (ibid).

The Nemesis

The ‘Nemesis’ is an electric car designed and built by Ecotricity (pictured below). The Nemesis is powered entirely by electricity produced by the wind and can reach speeds of 151mph (which is incidentally the UK electric car land-speed record) (Ecotricity, 2012).

The car took two years to build and was designed to “smash the stereotype of electric cars”.  I don’t know about you but I think they have done a pretty good job!

So if they provide the cleanest energy, have the best customer service and run some other cool green projects why doesn’t everyone use them?

One word – cost.

In a study conducted by financial website This is Money (2012), the average Ecotricity customer on their New Energy Plus with Green Gas plan would pay £1,325 per year. This is £271 more than the cheapest option, First Utility’s iSave v2, which costs just £1,054 per year.

This presents energy customers with a dilemma…

Do they get the cheapest option and carry on using primarily nonrenewable energy sources or do they pay more and use a greener energy source?

Personally, I believe in the power of economics. If the people who understand the importance of using renewable energy sources and have the financial security to be able to afford an extra £271 a year were to switch to Ecotricity, there would be two main benefits:

Firstly, Ecotricity would have more revenue to be able to invest in their green initiatives. This would mean that they could eventually offer entirely green electricity and gas.

Secondly, if a large number of people were to switch to Ecotricity, the existing energy companies such as EDF would lose custom. In an attempt to regain these leaving customers, these companies would be forced to increase the percentage of renewable sources that makes up their energy.

I do not believe that Ecotricity should be the only company to offer a green product and have a monopoly in this industry. My hope is that Ecotricity can be used as a platform for environmentally conscious consumers to show the large energy companies how much renewable energy means to them. If the big energy companies start losing money because people prefer to buy a greener product, they will be forced to offer a greener product themselves. It is at this point that renewable energy will become much more affordable because as the amount of competition goes up the price goes down (this happens because companies who offer identical products to their rivals tend to try and attract customers by offering the lowest price). Then, if all goes to plan, green energy will become much more accessible for every single person living in Britain.

As always, I would love to hear your thoughts.

Thanks for reading.

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About Think Outside The Cliché

I write blogs that try to encourage people to think differently about their purchasing behaviour. I also write blogs that attempt to show companies that there are often other unconventional ways to conduct business. Whether you are a consumer or a business person there will be definitely be something interesting in my blogs for you. I hope you enjoy them and please remember I always, always appreciate constructive feedback.

7 responses to “A Very Green Dilemma…”

  1. Heliumhead says :

    Is green the new brown?

  2. Toby says :

    This is brilliant Christian! Once I have a place to live and enough income, I will join Ecotricity or a similar green energy company. Do you know if Ecotricity are looking in to natural gas at all?

  3. Declan McClelland says :

    I really enjoyed reading this blog Christian – it’s the first time I’ve seen a blog post by you because you’re right at the bottom of my blog roll and I’ve always finished my comments before I reach you! When I figured out that you were ‘thinkoutsidethecliche’ (due to the Leyton Orient related comment) I had to pay you a visit.

    I’ve also been thinking about the economics of green energy recently, but from the perspective of electric motoring. Given how expensive petrol is becoming, and the annual costs of maintaining a car, I had a look at the viability of owning an electric car.

    Currently, an electric car is well out of most peoples price range (£28,000 or thereabouts). However, they do have a number of benefits. They are far cheaper to run that fuel cars, cost less to fix, (electric circuitry is easier to fix and less things go wrong than they do in combustion engines), and of course there’s no road tax or congestion charge.

    As electric car prices get lower, fuel prices continues to increase, and more electric cars enter the second hand market, I’m looking forward to the point where the see-saw tips, and it becomes more viable for the average person to use an electric car than a petrol/diesel car. At that point, as you mention in your blog in relation to green energy, companies will start to lose money, and then they will all be vying to enter the electric car market, increasing competition and driving down prices. And then, like green energy, fossil fuel free motoring will become a realistic option for everybody. Hooray!

    • thinkoutsidethecliche says :

      Hi Declan – thanks for your comment.

      Electric cars are certainly an intriguing area. You may be interested to know that Ecotricity offer a number of electric vehicle charge points across the UK. They are also now installing much faster chargers – ones which can charge a car in just 20 minutes (Ecotricity, 2012).

      The trouble is that Ecotricity and other electricity providers won’t install hundreds of charging points because there are not very many electric cars in existence. And people won’t buy electric cars because there aren’t enough charging points (amongst other reasons). This is a classic catch-22 and I’m not really sure what the next steps should be.

      Ecotricity are currently not making people pay to charge their electric vehicles. This is done in an attempt to encourage more people to sign up to the ‘electric vehicle revolution’. I applaud this move and I hope it works. The thought of free fuel as well reducing my carbon emissions certainly makes me seriously consider the possibility of owning an electric car.

  4. jimmyg says :

    Yes I’ve just found this blog too – all the way down the blogroll! It was intriguing to read about Ecotricity. I have heard of eco electric companies before but didn’t realize that one of them sponsored a football club. That’s a stroke of eco-marketing genius. And even though they aren’t perfectly renewable at least they are heading in the right direction. Sponsoring and naming a football club is a great way to get the sustainable message through to consumers. Football is not the first industry you would think of when it comes to sustainability. All those fancy cars and holidays in the Caribbean. But it makes sense, we all use electricity. There are so many football fields in the UK and imaging if all of them were to become pesticide free. Pesticide usage must be huge when you factor in all those perfectly manicured pitches in the various leagues. Good on you Ecotricity for making a stand and probably converting a few thousand people in the process.

  5. greenConsuming says :

    I’m actually very surprised with the numer of customers that this company has within the UK. Although, almost 68.000 is a large amount, it is only 0.11 % of the total population in Britain, and that is not a huge amount of the market share. But what is going on with green electricity? Why it is such a special product?

    There are other green products that can offer an individual benefit, for example organic food. An organic egg doesn’t only relax your mind about the environmental cost of its product, but at the same time tastes much better and it is less likely going to contain rests of antibiotic or another chemical substances used on intensive animal production, so it also has a benefit on your health. However green energy doesn’t have an individual benefit: you are receiving exactly the same product as if you purchase common energy, with the only difference that it is produced from renewable sources. That means the benefit is only “ethical” and not having this individual direct benefit, it might be -in my opinion- more difficult to market into non environmental concerned customers.

  6. psub06 says :

    It is clear that there is an influence of price on what energy companies people use. There are price comparison sites for electric providers, but are there comparison sites for how ‘green’ a company is? Plus there is the issue of the company perhaps being less well known – until I read your blog I have never heard of this company before. I would love to be able to use a company like this for my electric, however there is a value-action gap between what company I would like to use and what company I actually use. As a student I have very little income, and after buying rent and food I pretty much have no disposable income, and so of course will always go for the cheapest option. But I would like to think that if I did have the money I would be inclined to use this provider over a less environmentally friendly source. Fascinating read and I’ve definitely learnt something new here!

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