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

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The institutionalisation of green electricity 175 and acquire foreign facilities. Both companies remained committed to attracting new customers based on new or recently installed facilities and significantly increased the share of renewable electricity production within their production portfolio. Table 6.3 Main providers of green electricity in 2002 Provider Product name Sources Origin Essent ‘Green electricity’ Wind, water, biomass principally Dutch Nuon ‘Nature current’ Solar, wind, water Dutch and foreign Nuon ‘Green current’ Biomass, wind, water mainly Dutch Eneco ‘Eco electricity’ Solar, wind, water, biomass Dutch and foreign Delta ‘Zeeuws green’ Wind, biomass Dutch Remu ‘Eco power’ Solar, wind, water, biomass Dutch Cogas ‘Cogas green’ Biomass, some wind Dutch and foreign Rendo ‘Green power’ Hydropower, biomass mainly foreign Echte Energie ‘Clean power’ Solar, wind, water Dutch Energieconcurrent ‘Green power’ Wind principally Dutch Energiebedrijf ‘Green force’ Biomass, wind Dutch and foreign Shell ‘Green power’ Swedish biopower mainly foreign Vattenfall ‘Green power’ mainly hydropower mainly foreign (based on Kroon ( 2002: 15) and www.greenprices.nl) Figure 6.3 Business strategies for green electricity: shifts and differences Echte energie 2002 Essent 1996 Essent 1999 Domestic origin International origin Essent 2002 Narrowly defined renewable sources Nuon 1996 Nuon 2001 Nuon 2002 Broadly defined renewable sources Energiedirect 2002 Shell 2002

176 Chapter 6 After the opening of the Dutch retail market for green electricity in July 2001 the number of green electricity customers increased from about 250,000 to approximately 800,000 early 2002 and 1.4 million in January 2003. The sharp increase was caused by aggressive marketing campaigns for green electricity customers, pricing strategies that even led to green electricity offered below the price of conventional electricity (made possible by the favourable fiscal measures for green electricity), and the focus on green electricity as a tool for energy companies to attract new customers and establish their retail brand in anticipation of full liberalisation of the electricity market. Support system dismantled due to opening up of green electricity market Liberalisation of the market for green electricity also generated a not intended side-effect. The attractive compensation for green electricity, which consisted of restitution of the regulatory energy tax and a producer compensation for renewable electricity, the strong rise in customer demand for green electricity and the difficulty of initiating domestic renewable electricity facilities led domestic producers to increasingly import renewable electricity 23 . Also foreign energy providers started to offer green electricity to Dutch customers as from 2002 on renewable electricity exported to the Netherlands could qualify for the green certificate scheme and consequently become eligible for exemption from the regulatory energy tax. The result was that the growth in demand for green electricity after liberalisation was mainly satisfied by green electricity of already existing installations for renewable electricity generation, especially hydropower and biomass facilities (Kroon, 2002: 26; Reijnders, 2002). Differences in support schemes for renewable energy around Europe contributed to this, with only in the Netherlands the support system was mainly based on fiscal measures, whereas in most European countries the main schemes were supply oriented feed-in tariffs or demand oriented quota obligation or renewable portfolio standards (van Sambeek and van Thuijl, 2003). Although the threat of companies exploiting the mismatch between different policy frameworks was pointed out early (Boots et al., 2001), the strong rise in imports was not anticipated by Dutch government. Public and political discussion regarding the leakage of tax money through imported green electricity led to abolishment of the demand-oriented fiscal scheme in 2003. The system was replaced by subsidies for the electricity generated from facilities using 23 If specific contracts were made with foreign suppliers regarding renewable electricity, this contracted electricity was also eligible for the exemption of the regulatory energy tax and production subsidies could be received. Provisions in the Green Tax Act (WBM in Dutch) prohibited making distinction between renewable production in and outside the Netherlands (Kroon, 2002: 10).

The <strong>institutional</strong>isation of green electricity 175<br />

<strong>and</strong> acquire foreign facilities. Both companies remained committed <strong>to</strong><br />

attracting new cus<strong>to</strong>mers based on new or recently installed facilities <strong>and</strong><br />

significantly increased <strong>the</strong> share of renewable electricity production within<br />

<strong>the</strong>ir production portfolio.<br />

Table 6.3 Main providers of green electricity in 2002<br />

Provider Product name Sources Origin<br />

Essent ‘Green electricity’ Wind, water, biomass principally Dutch<br />

Nuon ‘Nature current’ Solar, wind, water Dutch <strong>and</strong> foreign<br />

Nuon ‘Green current’ Biomass, wind, water mainly Dutch<br />

Eneco ‘Eco electricity’ Solar, wind, water, biomass Dutch <strong>and</strong> foreign<br />

Delta ‘Zeeuws green’ Wind, biomass Dutch<br />

Remu ‘Eco power’ Solar, wind, water, biomass Dutch<br />

Cogas ‘Cogas green’ Biomass, some wind Dutch <strong>and</strong> foreign<br />

Rendo ‘Green power’ Hydropower, biomass mainly foreign<br />

Echte Energie ‘Clean power’ Solar, wind, water Dutch<br />

Energieconcurrent ‘Green power’ Wind principally Dutch<br />

Energiebedrijf ‘Green force’ Biomass, wind Dutch <strong>and</strong> foreign<br />

Shell ‘Green power’ Swedish biopower mainly foreign<br />

Vattenfall ‘Green power’ mainly hydropower mainly foreign<br />

(based on Kroon ( 2002: 15) <strong>and</strong> www.greenprices.nl)<br />

Figure 6.3 Business strategies for green electricity: shifts <strong>and</strong> differences<br />

Echte energie<br />

2002<br />

Essent 1996<br />

Essent 1999<br />

Domestic origin International origin<br />

Essent 2002<br />

Narrowly defined renewable sources<br />

Nuon 1996 Nuon 2001<br />

Nuon 2002<br />

Broadly defined renewable sources<br />

Energiedirect<br />

2002<br />

Shell 2002

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