Ofgem issues tariff cap exemption to Good Energy

Ofgem, the Government gas and electricity regulator, recently announced a decision to issue Good Energy an “enduring derogation for renewable Standard Variable Tariffs (SVT) from the Default Tariff Cap” due to its ability to prove the clean sourcing of the energy that it provide its elective customers.

Good Energy has lived up to Ofgem’s criteria for an exemption, outlined in a statement providing guidance on how and in what cases these derogations are offered. Good Energy provided Ofgem with proof that its energy tariff is a SVT that consumers have chosen to be on, that the tariff provides support to renewables that exceeds the support that may be brought about by subsidies, obligations or other regulations, and that the cost for Good Energy to supply electricity and gas through the tariff is greater than the previously set default tariff cap due to the support provided to renewables. In this case, a Good Energy tariff costs about £1,422, slightly higher than the price cap average of £1,254.

Good Energy buys energy directly from renewable sources. While the cost may now legally exceed the price cap, Good Energy’s demographic can choose to either opt for this extra cost with the knowledge that their energy is being sourced from 100 per cent renewable sources, or opt out and buy their energy at or below the price cap without the same assurance of ecological sustainability. While the higher price perhaps acts as a disincentive for some consumers, Good Energy is an early example of a 100 per cent renewable energy option in the energy market, and exemptions from regulations like these could encourage other energy providers to join the market and provide their customers with sustainability-verified energy.

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