Innovation and institutional change: the transition to a sustainable ...
Innovation and institutional change: the transition to a sustainable ... 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.
172 Chapter 6 Table 6.1 Milestones in the introduction of green electricity 19 Year Activity 1990 PNEM publishes first environmental action plan 1991 Agreement on CO2 reduction targets in environmental action plan for the sector, introduction of MAP levy 1993 Idea for green electricity emerges, business plan developed 1994 PNEM registers the product name ‘green electricity’ as a trademark 1995 PNEM approaches WWF to act as external controller for the green electricity Pilot project for ‘green’ electricity in the Municipality of Tilburg results in 400 customers who pay a premium of around 4 €cents on top of the normal electricity price of 9 €cents Green electricity introduced in whole Province of North Brabant resulting in 2350 customers at the end of the year (on a total of around 800,000 customers) 1996 Decision to construct biomass fired power station to secure green electricity supply in anticipation of growing demand Regulatory energy tax for small electricity consumers is introduced (1.5 €cents per kilowatthour, kWh), with an exemption for renewable energy Other energy companies also launch green electricity as a new product under other names (nature electricity, eco-electricity) 1997 Number of green electricity customers at PNEM rises to 10,000 1998 PNEM merges with MEGA, forming an electricity distribution utility for the provinces of North Brabant and Limburg, with 40,000 green electricity customers at the end of the year Energy distributors start with a tradable green label system Approval of environmental permit for the biomass power plant at Cuijk, agreements with Staatsbosbeheer to supply clean wood for the power plant 1999 National campaign for green electricity is started by WWF; the number of green electricity customers grows with 38 % (44,000) in four months) The utility Essent is formed through a merger of PNEM-MEGA with the distribution company Edon. Essent has 65,000 green electricity customers in November (on a total of around 2.4 million customers) 1999 The Cuijk biomass fired power plant starts its operations being able to serve around 70,000 customers of green electricity 2000 After a hike in the regulatory energy tax (to 4 €cents per kWh) prices of green electricity become competitive to conventional electricity, overall number of customers rises from around 120,000 in January to 200,000 at the end of the year 2001 Liberalisation of green electricity market at July 1st, customers are free to 19 Data from this table based on interviews with Remmers (2000, 2001), Van Gestel (2001), Schöne (2001), Vis (2001), Wiechers (2005); information from Dutch newspapers, www.greenprices.com, Essent (2000) on green electricity customers.
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172 Chapter 6<br />
Table 6.1 Miles<strong>to</strong>nes in <strong>the</strong> introduction of green electricity 19<br />
Year Activity<br />
1990<br />
PNEM publishes first environmental action plan<br />
1991 Agreement on CO2 reduction targets in environmental action plan for <strong>the</strong> sec<strong>to</strong>r,<br />
introduction of MAP levy<br />
1993 Idea for green electricity emerges, business plan developed<br />
1994 PNEM registers <strong>the</strong> product name ‘green electricity’ as a trademark<br />
1995 PNEM approaches WWF <strong>to</strong> act as external controller for <strong>the</strong> green electricity<br />
Pilot project for ‘green’ electricity in <strong>the</strong> Municipality of Tilburg results in 400<br />
cus<strong>to</strong>mers who pay a premium of around 4 €cents on <strong>to</strong>p of <strong>the</strong> normal<br />
electricity price of 9 €cents<br />
Green electricity introduced in whole Province of North Brabant resulting in<br />
2350 cus<strong>to</strong>mers at <strong>the</strong> end of <strong>the</strong> year (on a <strong>to</strong>tal of around 800,000 cus<strong>to</strong>mers)<br />
1996 Decision <strong>to</strong> construct biomass fired power station <strong>to</strong> secure green electricity<br />
supply in anticipation of growing dem<strong>and</strong><br />
Regula<strong>to</strong>ry energy tax for small electricity consumers is introduced (1.5 €cents<br />
per kilowatthour, kWh), with an exemption for renewable energy<br />
O<strong>the</strong>r energy companies also launch green electricity as a new product under<br />
o<strong>the</strong>r names (nature electricity, eco-electricity)<br />
1997 Number of green electricity cus<strong>to</strong>mers at PNEM rises <strong>to</strong> 10,000<br />
1998 PNEM merges with MEGA, forming an electricity distribution utility for <strong>the</strong><br />
provinces of North Brabant <strong>and</strong> Limburg, with 40,000 green electricity<br />
cus<strong>to</strong>mers at <strong>the</strong> end of <strong>the</strong> year<br />
Energy distribu<strong>to</strong>rs start with a tradable green label system<br />
Approval of environmental permit for <strong>the</strong> biomass power plant at Cuijk,<br />
agreements with Staatsbosbeheer <strong>to</strong> supply clean wood for <strong>the</strong> power plant<br />
1999 National campaign for green electricity is started by WWF; <strong>the</strong> number of green<br />
electricity cus<strong>to</strong>mers grows with 38 % (44,000) in four months)<br />
The utility Essent is formed through a merger of PNEM-MEGA with <strong>the</strong><br />
distribution company Edon. Essent has 65,000 green electricity cus<strong>to</strong>mers in<br />
November (on a <strong>to</strong>tal of around 2.4 million cus<strong>to</strong>mers)<br />
1999 The Cuijk biomass fired power plant starts its operations being able <strong>to</strong> serve<br />
around 70,000 cus<strong>to</strong>mers of green electricity<br />
2000 After a hike in <strong>the</strong> regula<strong>to</strong>ry energy tax (<strong>to</strong> 4 €cents per kWh) prices of green<br />
electricity become competitive <strong>to</strong> conventional electricity, overall number of<br />
cus<strong>to</strong>mers rises from around 120,000 in January <strong>to</strong> 200,000 at <strong>the</strong> end of <strong>the</strong> year<br />
2001 Liberalisation of green electricity market at July 1st, cus<strong>to</strong>mers are free <strong>to</strong><br />
19 Data from this table based on interviews with Remmers (2000, 2001), Van Gestel (2001),<br />
Schöne (2001), Vis (2001), Wiechers (2005); information from Dutch newspapers,<br />
www.greenprices.com, Essent (2000) on green electricity cus<strong>to</strong>mers.