There were more than 4.5 million green power consumers
in Europe, the United States, Canada, Australia, and Japan
in 2004. Green power purchasing and utility green pricing
programs are growing, aided by a combination of supporting
policies, private initiatives, utility programs, and government
purchases. The three main vehicles for green power
purchases are utility green-pricing programs, competitive
retail sales by third-party producers allowed through electricity
deregulation (also called "green marketing"), and
tradable renewable energy certificates. Community-organized
green power programs also exist in Japan. As markets
expand, the price premiums for green power over conventional
power have continued to decline. In the United States,
retail green power premiums are now typically 1–3
cents/kWh.[
N34]
In Europe, green power purchasing and utility green
pricing have existed in some countries since the late 1990s.
By 2004, there were almost 3 million green power consumers
in the Netherlands, supported by a tax exemption
on green electricity purchases. Other countries in Europe
with retail green power markets include Finland, Germany,
Switzerland, and the United Kingdom. Germany’s green
power market has grown steadily since 1998, with more
than 600,000 consumers purchasing 2,000 GWh in 2004.
Eighteen European countries are members of RECS, a
renewable energy certificates system founded in the late
1990s to standardize and certify renewable energy certifi-
cates and trading. By 2005, a cumulative total of 33,000
GWh of renewable energy certificates had been issued, with
nearly 13,000 GWh of certificates used for consumer purchases
of green electricity.
*1
The United States has an estimated half-million green
power consumers purchasing 4,500 GWh of power annually.
Green power purchasing began in earnest around
1999. By 2004, at least 2 GW of additional renewable
energy capacity was built in the United States to accommodate
this market.
*2 The federal government is the largest
single buyer of green power, with the U.S. Air Force purchasing
320 GWh annually. By 2004, more than 600 utilities
in 34 states had begun to offer green-pricing programs.
Most of these offerings were voluntary, but regulations
were enacted in five states between 2001 and 2003 that
require utilities to offer green power products to their customers.
Utility green pricing accounted for almost half of
green power sales in 2004.
Many large companies in the United States, from aerospace
contractors to natural foods companies, are voluntarily
buying green power products. Among these corporate
buyers are IBM, Dow, Dupont, Alcoa, Intel, HP, Interface,
Johnson & Johnson, Pitney Bowes, Staples, Baxter, FedEx
Kinkos, General Motors, and Toyota. Public and non-governmental
initiatives have facilitated these buyers. The U. S.
Environmental Protection Agency’s "Green Power Partnership"
had 600 partners by 2005, purchasing 2,800 GWh of
green power annually. And a voluntary "Green-e" certification
program has helped build credibility in the market.
In Japan, there were an estimated 60,000 green power
consumer-participants by early 2005. These are utility customers
who voluntarily contribute to green power through
cooperatives, community organizations, and utility programs.
Green power in Japan initially developed through
voluntary community organizations. The first green power
program was initiated by a consumer’s cooperative union,
Seikatsu Club Hokkaido. Working with the regional utility,
the union collects electricity bills, along with voluntary contributions
from its members and the general public, and
invests in renewable energy projects.Members can purchase
shares in wind power projects, thus creating the first "citizen-
owned" wind turbines. Similar green funds have been
established elsewhere in Japan, and ten Japanese electric
utilities now offer customers an option to contribute to a
green power fund to support wind and solar systems. As of
early 2005, there were 57,000 customers making monthly
voluntary contributions to their electricity bills.
Renewable energy certificate markets have also emerged
in Japan. The Japan Natural Energy Company (JNEC) now
sells green power certificates to commercial and industrial
customers, including more than 50 large Japanese companies
like Sony, Asahi, Toyota, and Hitachi. JNEC will sell certifi-
cates to these companies representing a total of 60 GWh over
15 years, at premiums of 2.4–3.4 cents/kWh (3–4 Yen/kWh).
Australia has over 100,000 green power consumers purchasing
from a variety of retailers. And green power purchasing
is spreading to other countries. One example is
China, where twelve enterprises in Shanghai began to voluntarily
purchase green electricity from three local wind
farms in 2005, the first such purchases in China. The price
premium was high—6 cents/kWh (0.53 yuan) higher than
conventional power.
Footnotes
*1 In the United Kingdom, the distinction between voluntary green power purchases and renewable energy obligations by utilities has been questioned.
There are claims that green power voluntary purchases in the United Kingdom are not always "additional" to existing utility obligations. In Germany, more
than 50 percent of the green power market is served by hydropower plants, predominantly those put into operation well before the German electricity market
was liberalized.
*2 Green power purchases in the United States are separate from and additional to any renewable energy mandates, for example renewables portfolio standards.