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

The institutionalisation of green electricity 171
sector. Environmental action plans and the MAP-levy remained the main
umbrella under which investments in renewable energy took place. The
energy distributor PNEM was an exception: in 1996 they announced
termination of imposing the MAP-levy to their customers, instead PNEM
relied on funds built up through green electricity sales and on the intrinsic
cost-effectiveness of energy-saving measures. PNEM remained committed
to the goals of the environmental action plan but from their perspective
imposing a levy had become unjustifiable to their customers in the light of
the success of green electricity and the premium already imposed to buyers
of the product. This step was not followed by other energy distributors but it
was stated clearly that the funds generated by the MAP-levy were not to be
used for investments in renewable facilities that served green electricity
customers. In 1997 the number of green electricity customers had reached
25,000 in the Netherlands, with 10,000 green electricity customers for
PNEM, while the average premium paid was 3.4 €cents per Kwh.
External accounting for green electricity production became more
institutionalised as the third environmental action plan (for the period 1997-
2000) was formulated. In the new action plan the distribution companies
voluntarily agreed to achieve a goal of 3.2% of electricity sales based on
renewable energy sources by 2000. Part of the agreement with the Ministry
of Economic Affairs was also the establishment of a system of tradable
green labels. These labels were issued based on production of electricity
through renewable energy facilities. This implied that energy distributors
could buy green labels from other distributors with renewable energy
facilities in their respective regions. The green label system started in 1998
with EnergieNed acting as central registrar for green labels and verifying
whether companies satisfy their obligations. The Treasury verified whether
company really produced based on renewable energy facilities (EnergieNed,
2001a). Consequently, from 1998 until the end of the environmental action
plan of the distribution sector in 2000 two parallel accounting systems were
in place. One to verify the amount of renewable electricity produced in the
framework of the environmental action plans of the energy distributors, and
one to verify the ‘greenness’ of green electricity that customers contracted
and to ensure that revenues based on green electricity sales were re-invested
in new renewable energy facilities.