ASA Adjudication on Npower Ltd

Ad

A magazine ad, for Juice electricity supplied by npower, was headlined "npower, the green energy behind concerts at Wembley Stadium". Text continued "We're the Official Energy Supplier to Wembley Stadium - powering the arch and stadium with renewable energy".

Issue

The complainant challenged whether the ad misleadingly implied Wembley Stadium was powered by energy drawn mostly or exclusively from renewable sources.

CAP Code (Edition 11)

Response

RWE npower plc (npower) said they were, by arrangement, the official electricity suppliers to Wembley stadium. They said an equivalent amount of renewable energy was purchased by them and put into the national grid to match the demand of Wembley stadium over an extended period of up to two years. They said they believed that this concept was sufficiently understood by consumers so as not to mislead. They explained, that in line with Climate Change Levy legislation, they were required to provide a paper trail for HM Revenue to demonstrate that sales of renewable energy were matched by purchases from renewable sources. They therefore believed that the claim that Wembley Stadium was powered by 100% renewable energy was justified.

Npower also pointed out that the ad explained the system to householders in a footnote that stated "The electricity you receive remains the same, npower will estimate your Juice energy consumption throughout the year until year end when we check your annual consumption date and ensure the correct amount of renewable energy has been purchased to cover your annual consumption. This ensures an equivalent amount of electricity is generated from clean renewable sources, which is better for the environment."

Assessment

Upheld

The ASA understood that the Climate Change Levy was a tax on electricity delivered to non-domestic users in the UK, whereby electricity generated from new renewable sources and approved cogeneration schemes was a tax exempt category. We acknowledged that this levy was administered by HM Customs and Revenue. We noted, exemption from the tax with respect to electricity from renewable sources required the provision of a renewable source declaration which meant that the amount of electricity supplied would not exceed the amount of renewable source electricity acquired or generated in any one period. We understood that The Office of Gas and Electricity Markets (Ofgem) issued Levy Exemption Certificates (LECs) to accredited generators of renewable electricity and that these could be sold to suppliers. We understood that LECs were directly linked to the transfer of electricity from a renewable source to the purchaser insofar as this was possible. We understood  that npower had the option of generating renewable electricity itself, or purchasing LECs from other accredited generators equivalent to the amount supplied to Wembley Stadium, and that HM Customs and Revenue would require an audit trail for this. We noted that the trading system for energy from renewable sources for non-domestic supply with respect to exemption from the Climate Change Levy (LECs) operated differently from the trading system for energy from renewable sources which would apply to npower Juice (ROCs, under the Renewables Obligation) and that the latter trading system was not audited by HM Customs and Revenue. We understood that electricity from many different sources was pooled in the National Grid, and that both domestic users and non-domestic users such as Wembley Stadium would have their electricity, purchased from npower, delivered via the National Grid.

The ASA noted that the sourcing and distribution of "green electricity" was complex and might not be well understood by consumers. We considered that readers were likely to infer from the headline claim "npower, the green energy behind concerts at Wembley Stadium" and the accompanying text "We're the Official Energy Supplier to Wembley Stadium - powering the arch and stadium with renewable energy" that all the energy supplied to Wembley by npower was directly supplied from renewable sources. Because the footnote in the ad did not explain that energy was supplied to Wembley Stadium via the National Grid, we considered that many consumers would not understand that renewable energy was not directly responsible for power at the stadium but was supplied to the National Grid via a certificates trading system. We further considered that the small print in the footnote was not sufficiently prominent to clarify the impression created by the headline and body copy that all or most electricity supplied through npower Juice was directly supplied from renewable sources. We concluded that the ad could mislead.

The ad breached CAP Code clauses 3.1 (Substantiation) 7.1 (Truthfulness) and 49.1 (Environmental claims)

Action

The ad should not be shown again in its current form.

Adjudication of the ASA Council (Non-broadcast)