Eon, one of the “Big Six” UK energy providers, is to shift all of its residential customers to 100 per cent renewable electricity, becoming the largest utility yet to move to green supply.
The company, which supplies 3.3m British homes, said all of its customers would be moved to renewable electricity supplies from Tuesday, adding that it wanted to signal to the market that more wind and solar power will be needed in the future.
“First of all, this is what customers want,” said Michael Lewis, chief executive of Eon UK. “But we also want to send a signal to the wholesale market that we want to drive uptake of renewable energy.”
Eon is not the first UK energy supplier to claim that it delivers all of its customers carbon-free electricity. Shell Energy — known as First Utility before its acquisition by Shell in March — and energy challenger Bulb also claim to deliver 100 per cent electricity to their customers.
But the German group’s move will heap pressure on rivals to follow suit, with customer surveys increasingly showing a preference for electricity derived from green energy sources.
Eon said it plans to supply a large proportion of the power through its own 1.8GW renewable generation supplies, in addition to agreements with independent wind power producers.
The remainder will be accounted for by purchases under the renewable energy guarantee of origin certificate system, run by regulator Ofgem. One Rego certificate is issued for every unit of electricity generated from a renewable source put into the grid.
The move may raise questions about whether the UK needs to accelerate the expansion of its renewable capacity if more utilities follow suit.
The UK is set to generate more than 50 per cent of its electricity from low carbon sources this year, including nuclear, but a large proportion is still generated by burning natural gas in power plants.
Eon said its renewable supplies would not include those sourced from nuclear, but many analysts argue atomic energy will need to be part of the mix if the UK is to meet its target of cutting green house emissions to net zero by 2050.
The switch will not apply to Eon’s industrial customers, who buy just under half the electricity the company supplies in the UK and which can already choose renewable-only tariffs. The move also does not apply to gas supplies.
Eon’s announcement comes at a time when the incumbent energy utilities are facing fresh competition from new challengers such as Bulb, Ovo Energy and Shell Energy, enticing a quarter of consumers to switch to one of the new providers, as a result of the government and regulators promoting greater market competition.