OVO’s fuel mix challenge: out with the coal, in with the renewable

By Justin DeKoszmovszky Tuesday 06 January 2015

One of the questions we get on our fuel mix has to do with coal. It is a great question and we love having customers and potential employees who are that engaged with the issues. The short answer is, we are proud of the steady increase in our renewable share but we are not happy about how much coal we have in our fuel mix. 

Why so much coal?

Coal was an important part of the UK’s history, but it has very little place in our future. Coal had its time when we had few other options available, but it is now too dirty, too polluting and, increasingly, too imported (41% of coal used to generate electricity in the UK during 2013 came from Russia).

OVO does not wittingly buy any coal or coal-generated energy. What happens is that the ‘vertically integrated players’ (energy companies which both generate energy in power stations and supply it to customers through retail businesses) naturally supply a large proportion of the energy they themselves have produced. This means the fuel mix they report will be heavily weighted toward whatever type of fuel their own generation portfolio might use. 

This leaves independent suppliers (those owning no generation assets) reporting what is left over once, for example, the majority of nuclear and gas has been claimed by its owners. Independent suppliers like OVO, buying largely from the wholesale market, have no control over ‘this residual mix’. Because OVO buys energy from the wholesale market, we end up with more coal and a higher CO2 intensity than we want and even more than the average. We are not happy about this. 

What is OVO doing about coal?

OVO doesn’t take this sort of incumbent market failure and just accept it. Raising awareness and fixing fundamental and important problems like this is a serious priority for us. Because of how long it has been around and how much we relied on it in the past, coal remains a big part of our national fuel mix. This needs to change.

Along with a number of other key stakeholders, OVO is working hard on the policy side to encourage new market mechanisms to allow us to get out of coal. We think there should be a clear carbon price to make coal less competitive. We are also looking at regulatory innovation to enable suppliers to signal they want less coal in the system. While that may be a long fight, OVO is consistently increasing the amount of renewable power that we buy which directly reduces the amount coal-generated power we sell. We have to balance this with the cost but we are proud of our track record. 

Would you like to join us in finding a cleaner, safer more independent way to power the UK? Every customer on our Greener plan is 0% coal and 100% renewable power—that helps! We are also more than happy to discuss this further let’s keep the conversation going on Twitter. 

O​VO​ Energy Ltd, registered office 1 Rivergate Temple Quay Bristol, BS1 6ED, company no. 06890795 registered in England and Wales, VAT No. 100119879

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1Monthly cost - Representative monthly direct debit costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas) paying in advance by direct debit, including online discount.  All rates correct as of 20/3/2018, but may go up or down.

2Weekly cost - Representative weekly costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas).  All rates correct as of 22/11/2017, but may go up or down.

3Pay Monthly Savings claims: Saving based on the estimated annual cost of Simpler tariff for a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas) paying monthly in advance by direct debit, including online discount. Comparisons made against the average of the Big 6 standard variable tariffs with equivalent features. All rates correct as of 20/3/2018.“The Big 6” are British Gas, Scottish Power, SSE, Npower, E.ON and EDF.

4Pay As You Go Savings are based on the average estimated annual costs for new PAYG OVO customers quoted through the OVO website (based on household and/or consumption information provided by those customers), compared to their current supplier and tariff. Comparisons taken between 01/01/2016 and 11/10/16. Incl VAT. Actual savings may vary according to your current supplier or tariff, individual tariff options, household information, consumption and location. 

We include almost twice as much renewable electricity as the national average: At least 33% of electricity in all of our tariffs comes from renewable sources. The national average, according to Ofgem as at March 2014 was 16.7%. For more information please visit this page.

33% of your electricity comes from renewable sources: 33% renewable electricity as standard as of 1st April 2015. Renewable electricity is generated from wind, solar, geothermal, wave, tidal, hydro, biomass, landfill gas, sewage treatment plant gas and biogas.

OVO Interest Rewards: Interest Rewards are paid on credit balances of customers paying by monthly Direct Debit. It is calculated at 3% in your first year, 4% in your second year and 5% in your third year (and every year thereafter) if you pay by Direct Debit. Interest Rewards are paid monthly based on the number of days you’re in credit and the amount left in your account after you’ve paid your bill. Full terms apply:

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94% of surveyed customers would recommend us: OVO conducted a survey of their customers in between 1st January 2016 and 15th April 2016. Out of 15,312 customers who responded, over 94% rated OVO 6+ when asked 'how likely would you be to recommend us to a friend and family, on a scale of 1 to 10.

uSwitch's Energy Supplier of the Year 2017: OVO energy was voted and awarded  'Energy Supplier of the year' and best for: Overall Customer Satisfaction, Most Likely to be Recommended, Value for Money, Best Deal for You, Customer Service, Billing Services, Energy Efficiency, Meter Services, Online Services, Green Services and Transfer Process. OVO Energy scored a 96% customer satisfaction score.

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