Promoting Green Power in Canada - Centre for Human Settlements

Promoting Green Power in Canada Pollution ProbeTable 3.7 — Evolution of the GermanElectricity Tax, in €cent per kWh [SSDE2002]4/1999 2000 2001 2002 2003and later1.02 1.28 1.53 1.79 2.05(2.9¢ CDN)a decrease in investment cost translatesnearly proportionately into a decrease ofproduction cost [ibid., p. 93]. Governmentsupport is sometimes seen as conflictingwith green power marketing, as customersdo not want to pay premiums for productsthat are already sufficiently supported bythese programs. Certification organizations,in particular OK-Power, have tried to addressthis issue by setting standards for theinclusion of government-subsidized capacityin green power products [NREL 2002, p. 29].In 1999, Germany introduced an energy tax,in the framework of its ecological tax reform.This tax increases over time (see Table 3.7)and renewable power is exempt from the tax.Tax reductions are availablefor energy use during off-peaktimes or for certain sectors,such as agriculture [SSDE2002]. Most of the fundsraised through the electricitytax are returned to the citizenthrough a reduction inpension insurancecontributions. €200 millionper year, or €250 million(C$350 million) in 2003, willbe used to support renewablepower deployment [BMU2002].3.3.3 Denmark — People PowerDenmark has been very successful inincreasing its renewable power portfolio (seeFigure 3.16). Denmark is now the nationwith the highest proportion of electricitygenerated from wind (18%), and generatesabout 6% of its electricity from biomass.With 27% of its electricity expected to comefrom renewables in 2002, Denmark is wellahead of its national goal of 20% by 2003[AWEA 2002]. This has been accomplishedin the absence of any green pricing ormarketing schemes, in which consumers optfor green electricity products [DWIA 2001].The secret of Danish success has been, like inGermany, the use of feed-in tariffs, incombination with other incentives: a 4.4€cent/kWh feed-in tariff is paid for wind overa ten-year period. In addition, a renewablepower production incentive of 2.3 €cent/kWh is paid to all renewable power projects;finally, all renewable power is exempt fromthe 1.3 €cent/kWh CO 2tax. The funds forthe production tax credit are covered by theCO 2tax revenues [IEA 1998b]. Like in Texas,Figure 3.16 — Installed Wind Generating Capacityin Denmark [BWE 2002]43