Table of Contents
DATAMONITOR VIEW
- CATALYST
- SUMMARY
- METHODOLGY
- SOURCES
ANALYSIS
- Environmental issues are taking centre stage across world energy markets
- To date, the global market for green energy tariffs has been driven by
three main factors
- Interest in protecting the world' s environment has increased
dramatically, presenting new opportunities for B2C green tariffs
- The emergence of green retail tariffs is a response to the
liberalization of electricity and gas markets worldwide
- The Kyoto Protocol instigated a political movement that drove the uptake
of large-scale renewable power worldwide
- Renewable energy directives worldwide have sparked the adaptation of
numerous legal frameworks (1/2)
- Renewable energy directives worldwide have since sparked the adaptation
of numerous legal frameworks (2/2)
- Legislation and green awareness have spurred the strong uptake of
renewable power on the supply side, led by EU Member States
- Globally, key renewable energy indicators have shown dramatic gains over
the past three years - a trend which is likely to continue
- Consumers will change their habits provided utilities offer them the means
and incentives to do so
- More than half of Europeans feel informed about climate change
- Europeans deem climate change to be a very serious issue and one of the
most serious problems facing the world
- Climate change is perceived as a serious problem, but one which European
citizens are willing to address
- A significant proportion of Europeans citizens are willing to pay more
for green energy
- Green tariffs linked to the reduction of energy consumption in the home
demonstrate great comparative potential
- Genuine concern about climate change does not always result in remedial
actions with tangible green benefits
- Where electricity prices are much higher than the EU average, citizens
are less willing to pay for green energy
- Europeans citizens believe that the different stakeholders aren' t doing
enough to fight climate change
- Green tariffs could help meet the expectations that citizens have of
corporations and industry
- A review of countries involved in green tariff marketing suggests lessons
are to be learned in the US
- In the US' partly deregulated electricity market, three types of green
power retail offerings coexist
- Despite the economic downturn, US utilities significantly expanded green
power sales at a national level
- Utility green energy sales in the US continue to make up an increasing
part of total retail electricity sales
- More US consumers are making clean power choices than ever before
- The success of US green tariffs is attributed to persistent and creative
marketing strategies and a falling premium
- US green power markets will continue growing but state RPS requirements
threaten to alter market dynamics
- In the UK, the disjuncture between green wholesale and green supply is
caused by the Renewables Obligation
- In the UK, the disjuncture between green wholesale and green supply is
caused by the Renewables Obligation
- Of the five types of ' green' tariffs offered by suppliers in the UK in
2008, some were much ' greener' than others
- Of the five types of ' green' tariffs offered by suppliers in the UK in
2008, some were much ' greener' than others
- In 2008, most ' green' energy tariffs suffered from a lack of
transparency and clarity.
- In September 2009, there are less green source and green fund tariffs
than at the same time in 2008
- In the UK, there is still no impartial green tariffs accreditation or
audit scheme to substantiate supplier' s claims
- In Germany, green energy tariffs are actively being promoted as an
alternative and way of curbing unpopular nuclear and coal power
- Green tariffs are mainstream in the Netherlands but incoming EU
legislation could unsettle high rates of take-up
- The success of Australia' s green tariff program hinges on liberalized
energy markets and a strong accreditation program
- Pioneering green retail programs highlight the elements central to any
successful green tariff strategy
- Palo Alto has created one of the most effective and successfully
marketed green power programs in the US (1/2)
- Palo Alto has created one of the most effective and successfully
marketed green power programs in the US (2/2)
- Ecotricity has positioned itself as a semi-green, sustainable,
non-premium, small and credible energy company
- Green Energy UK differentiated itself by only supplying ' deep green' or
' pale green' electricity
- Good energy' s has positioned itself as the UK' s greenest and only 100%
true ' deep' green energy supplier
- British Gas offers two 100% green tariffs: Future Energy and Zero
Carbon, both at a price premium
- Bounce Energy offer fixed rate for their 100% renewable energy and a
modern and rewarding marketing program
- The deployment of best practices can offset many of the B2C renewable
energy market structure limitations
- Regional, national, and international policies drive the market for
green energy, mainly from the supply-side
- Green energy is subject to the economic needs of stakeholders and their
wider regulatory constraints
- Green energy providers are increasingly scrutinized and held to account
by their customers and industry
- Utilities must create new ' low hanging fruit' by driving the adoption of
renewable energy, by partnership
- Beyond government legislation, best practices in green tariff marketing
centre on price, product and promotion
- The successful sale of utility green energy tariffs must focus on five
key elements of strategy
- The burden is on utilities to lobby governments and amend their own
internal product management operations
APPENDIX
- Footnotes
- Graphs of US green pricing program renewable energy sales and US price
premium charged for new renewable power - footnotes:
- Graph of US green pricing program renewable energy sales
- Graph of US green power sales as a percentage of total retail sales
- Graph of US customer participation rate
- Graph of US price premium charged for new renewable power
- Ask the analyst
- Datamonitor consulting
- Disclaimer
FIGURES
- Figure: The most interesting outcome of the Kyoto Protocol is the green
impetus that it has generated
- Figure: By the end of 2007, no less than 60 countries (37 developed and
transition countries and 23 developing countries) have some form of policy to
promote renewable power generation
- Figure: By the end of 2007, no less than 60 countries (37 developed and
transition countries and 23 developing countries) have some form of policy to
promote renewable power generation
- Figure: Over the past decade, only in the EU has the average growth in
renewable electricity output outpaced that of conventional electricity
- Figure: Globally, key renewable energy indicators have shown dramatic
gains over the past three years - a trend which is likely to continue
- Figure: More than half of Europeans feel informed about climate change but
more than four in ten respondents do not
- Figure: Nearly all countries polled considered poverty and the lack of
food and drinking water, and global warming/climate change to be the most
serious problems facing the world
- Figure: Citizens from the top right cluster of countries are most likely
to personally take action to fight climate change
- Figure: On average, in Europe, 48% of citizens are willing to pay up to
13% more for energy produced from greener sources
- Figure: In all countries covered, the reduction of energy consumption
appears to be the most widespread action taken by citizens in order to combat
climate change.
- Figure: Only in Cyprus, Denmark, Finland, Germany and Sweden do citizens
truly ' talk the green talk' and ' walk the green walk'
- Figure: Hungarians, Italians and Slovaks show lower willingness to pay for
green energy, while the opposite is true of Estonians, Finnish, French, Greeks
and Latvians.
- Figure: Corporations and industry are not doing enough to fight climate
change
- Figure: Majorities in all countries think that corporations and industry,
more than any other stakeholder, are not doing enough to fight climate change
- Figure: Austin Energy boasted the highest total green power sales (as of
Dec 2008)
- Figure: Legislation often requires suppliers to offer green tariffs, which
partly explains the higher loads of green power sales in 2008
- Figure: Across all three US markets and both customer segments, more US
consumers are making clean power choices than ever before (as of Dec 2008)
- Figure: The price premium charged for new, customer-driven renewable
power(a) in the US in 2008 varied widely from utility to utility
- Figure: In this illustration of the relationship between the wholesale and
supply markets, the supplier can either ' absorb' or ' pass on' the inputs from
the wholesale market to the supply market
- Figure: In the UK, certain ' green' tariffs are such that part - or even
all - of the supplied electricity may actually come from non-renewable sources
- Figure: Green energy programs are niche programs and they must be marketed
to customers correctly if they are to gain acceptance
- Figure: In the UK, certain ' green' tariffs are such that part - or even
all - of the supplied electricity may actually come from non-renewable sources
- Figure: Natural Power Ltd offering dominates
- Figure: Essent offers customers its ' green' option at the same price as
its ' grey' option
- Figure: Australia has among the highest penetration of residential
customers buying accredited green energy in the world, with one in nine
households taking a green product in 2009.
- Figure: Green Energy UK differentiated itself by only supplying two levels
of green power
- Figure: British Gas offers two one hundred percent green tariffs: Future
Energy and Zero Carbon, both at a price premium
- Figure: Bounce Energy offer fixed rate for their one hundred percent
renewable energy and a modern and rewarding marketing program
- Figure: Regional, national, and international policies drive the market
for green energy, mainly from the supply-side
- Figure: Green energy is subject to the economic needs of stakeholders and
their wider regulatory constraints
- Figure: Green energy providers are increasingly scrutinized and held to
account by their customers and industry
- Figure: Best practices in green tariff marketing centre on price, product
and promotion
- Figure: Selling green tariffs requires a different approach to the selling
of ' brown' energy, linking key elements of strategic marketing
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