Innovation and institutional change: the transition to a sustainable ...

122 Chapter 4
The focus on biomass based electricity generation is often strengthened by
its link to other policy fields, such as its role to close material cycles in waste
policy and manure policy (see also Raven, 2005). Due to its various
conversion routes, the various applicable sources and its links to various
policy fields there is also a multitude of actors involved in biomass
development, all with specific (different) agendas. Biomass has taken an
important position in transition routes and the recently developed research
agenda of Economic Affairs. Co-combustion of biomass in coal-fired power
plants has become the main route, and its evolution is characterised by
strong involvement of incumbent power producers after the covenant on CO2
reduction was agreed and after the electricity produced through biomass cocombustion
became eligible for the exemption of the regulatory energy tax
and later the feed-in premium.
4.13 The introduction of ‘green’ electricity
Consumers played a relative passive role in the electricity system until the
nineties. Whereas the role of industrial users increased with the emergence
of decentral combined heat and power production, households were ‘captive’
consumers (no choice, fixed prices) of electricity until well in the nineties.
Several developments, however, have facilitated changes in this mode of
provision. They include the changes in law concerning the electricity market
structure in 1989 and 1998 (two new electricity acts) and demands from the
government towards distribution firms with regard to the attainment of
certain environmental goals. From the middle of the nineties on PNEM was
the first energy distribution company to make a distinction between
renewable and non-renewable electricity in marketing (Hofman, 2002). For
the so-called ‘green’ electricity consumers pay a premium, which
compensated the higher purchase price the distributors paid to providers of
‘green’ electricity. In anticipation of liberalisation energy distribution
companies had become much more customer oriented and focused on its
product and marketing. Crucial is the way the concept involved a new
institutional arrangement with new roles for green electricity producers, an
environmental NGO, and consumers, which received swift support from
government, and spread rapidly as other firms started to imitate the concept.
Chapter six provides a detailed analysis of the emergence and diffusion of
the concept and institutional arrangement.