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 173 choose their own provider, the number of providers of green electricity rises to more than 20 and the number of customers rises sharply from 200,000 on Jan. 1 to around 800,000 at the end of the year 2002 Imported green electricity also becomes eligible for the exemption of the regulatory energy tax At July 1st the number of green electricity customers reaches 1 million in the Netherlands, market share of Essent is around one third 2003 Number of green electricity customers reaches more than 2 million, more than half supplied from power produced outside the Netherlands Exemption for regulatory energy tax is phased out and replaced by domestic support (feed-in premiums) differentiated for various types of renewable electricity generation 2004 Regulatory energy tax is renamed to energy tax In July the number of green electricity customers is estimated at 2.8 million. 2005 Formal obligation for electricity producers to inform consumers ex-post regarding shares of energy sources in their fuel mix and environmental impacts Broadly supported marketing campaign raises interest in green electricity From 1999 on the increase in consumers of ‘green’ electricity was rapid, with a growth rate of 47% between July 1st 1999 and January 1st 2000. Activities of the WWF were an important factor contributing to this increase. In September 1999, when green electricity had become available throughout the Netherlands, they started the campaign ‘Don’t Let the North Pole Melt, Go for Green Energy’ (Quarles van Ufford, 2000). The campaign, supported by the Ministries of Economic and Environmental Affairs, consisted of various advertisements in national newspapers, large scale actions with dressed up polar bears handing out 300,000 application forms on train stations, and with the North Pole, climate change, and green electricity as featured themes for one week in programs of one of the largest television broadcasting companies in the Netherlands. Overall the campaign led to acceleration in the monthly growth rates of green electricity from around 2500 to 10,000, and to a sharp increase in public recognition of the concept of green electricity (Schöne, 2001). For Essent, the company in which PNEM merged in 1999 with two other energy distributors, the number of green electricity customers gradually expanded from around 50,000 in 1999 to 300,000 in 2002 on a total number of around 2.4 million households to which Essent provided electricity. Essent’s main competitor, Nuon, offered the product ‘nature electricity’ starting from 1996 based on power production from solar, wind and hydro-power and realised growth rates similar to Essent.
174 Chapter 6 6.4 Liberalisation of the green electricity market In the development towards liberalisation of the Dutch electricity market the success of green electricity and the initial introduction of tradable green labels by energy distribution companies (in 1998) led to the decision to accelerate a separate liberalisation of the market for green electricity up to July 2001, earlier than the planned liberalisation of the regular electricity market for small consumers in 2004. This way both industry and consumers could gain experience with competition in the electricity sector. A parallel goal was to increase the share of renewable electricity in Dutch energy supply (PVE, 2000). A system of green certificates succeeded the green label system 20 and the green electricity scheme with WWF and became formalised with the independent grid operator TenneT 21 responsible for issuing the certificates (EZ, 2001). With these green certificates exemption from the regulatory energy tax could be obtained. Under the umbrella of TenneT a green certificate bank was established to keep electronic records of certificates and transactions 22 . Liberalisation of the green electricity market worked well to spur competition, with major providers engaged in extensive marketing campaigns and the number of providers growing from under ten in 2000 to above twenty in 2002. Strategies of providers increasingly started to diverge in terms of sources for green electricity, price-setting, and choice for domestic production or import of green electricity, as is shown in Table 6.3. With increasing competition and rising demand for green electricity strategies of individual providers also shifted as illustrated in Figure 6.3. Essent remained committed to domestically produced green electricity, but apart from ‘clean’ biomass for households also began to sell green electricity based on co-combustion of biomass within coal-fired power plants. To safeguard continuity of biomass supply it also increasingly had to import biomass. Nuon revoked its earlier decision to solely use ‘pure’ green electricity based on solar, wind and hydropower, and also started to offer another green variant based on biomass. The problem of finding renewable sites in the Netherlands also prompted its strategy to increasingly develop 20 The green label system was introduced in 1998 as part of the renewable energy targets of energy distribution companies within their environmental action plan. At the end of the environmental action plan in 2000 it was concluded that the target for CO2 reduction through renewable energy production (EnergieNed, 2001a). Landfill gas was responsible for more than half of the CO2 reduction (EnergieNed, 2001a: 41). 21 TenneT was established as independent operator of the high-voltage network under the Electricity Act of 1998. 22 In a ‘new economy’ fashion the system was fully digital, as certificates were issued electronically and not in a paper version.
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The <strong>institutional</strong>isation of green electricity 173<br />
choose <strong>the</strong>ir own provider, <strong>the</strong> number of providers of green electricity rises <strong>to</strong><br />
more than 20 <strong>and</strong> <strong>the</strong> number of cus<strong>to</strong>mers rises sharply from 200,000 on Jan. 1<br />
<strong>to</strong> around 800,000 at <strong>the</strong> end of <strong>the</strong> year<br />
2002 Imported green electricity also becomes eligible for <strong>the</strong> exemption of <strong>the</strong><br />
regula<strong>to</strong>ry energy tax<br />
At July 1st <strong>the</strong> number of green electricity cus<strong>to</strong>mers reaches 1 million in <strong>the</strong><br />
Ne<strong>the</strong>rl<strong>and</strong>s, market share of Essent is around one third<br />
2003 Number of green electricity cus<strong>to</strong>mers reaches more than 2 million, more than<br />
half supplied from power produced outside <strong>the</strong> Ne<strong>the</strong>rl<strong>and</strong>s<br />
Exemption for regula<strong>to</strong>ry energy tax is phased out <strong>and</strong> replaced by domestic<br />
support (feed-in premiums) differentiated for various types of renewable<br />
electricity generation<br />
2004 Regula<strong>to</strong>ry energy tax is renamed <strong>to</strong> energy tax<br />
In July <strong>the</strong> number of green electricity cus<strong>to</strong>mers is estimated at 2.8 million.<br />
2005 Formal obligation for electricity producers <strong>to</strong> inform consumers ex-post<br />
regarding shares of energy sources in <strong>the</strong>ir fuel mix <strong>and</strong> environmental impacts<br />
Broadly supported marketing campaign raises interest in green electricity<br />
From 1999 on <strong>the</strong> increase in consumers of ‘green’ electricity was rapid,<br />
with a growth rate of 47% between July 1st 1999 <strong>and</strong> January 1st 2000.<br />
Activities of <strong>the</strong> WWF were an important fac<strong>to</strong>r contributing <strong>to</strong> this increase.<br />
In September 1999, when green electricity had become available throughout<br />
<strong>the</strong> Ne<strong>the</strong>rl<strong>and</strong>s, <strong>the</strong>y started <strong>the</strong> campaign ‘Don’t Let <strong>the</strong> North Pole Melt,<br />
Go for Green Energy’ (Quarles van Ufford, 2000). The campaign, supported<br />
by <strong>the</strong> Ministries of Economic <strong>and</strong> Environmental Affairs, consisted of<br />
various advertisements in national newspapers, large scale actions with<br />
dressed up polar bears h<strong>and</strong>ing out 300,000 application forms on train<br />
stations, <strong>and</strong> with <strong>the</strong> North Pole, climate <strong>change</strong>, <strong>and</strong> green electricity as<br />
featured <strong>the</strong>mes for one week in programs of one of <strong>the</strong> largest television<br />
broadcasting companies in <strong>the</strong> Ne<strong>the</strong>rl<strong>and</strong>s. Overall <strong>the</strong> campaign led <strong>to</strong><br />
acceleration in <strong>the</strong> monthly growth rates of green electricity from around<br />
2500 <strong>to</strong> 10,000, <strong>and</strong> <strong>to</strong> a sharp increase in public recognition of <strong>the</strong> concept<br />
of green electricity (Schöne, 2001). For Essent, <strong>the</strong> company in which<br />
PNEM merged in 1999 with two o<strong>the</strong>r energy distribu<strong>to</strong>rs, <strong>the</strong> number of<br />
green electricity cus<strong>to</strong>mers gradually exp<strong>and</strong>ed from around 50,000 in 1999<br />
<strong>to</strong> 300,000 in 2002 on a <strong>to</strong>tal number of around 2.4 million households <strong>to</strong><br />
which Essent provided electricity. Essent’s main competi<strong>to</strong>r, Nuon, offered<br />
<strong>the</strong> product ‘nature electricity’ starting from 1996 based on power<br />
production from solar, wind <strong>and</strong> hydro-power <strong>and</strong> realised growth rates<br />
similar <strong>to</strong> Essent.