Promoting Green Power in Canada - Centre for Human Settlements

Promoting Green Power in Canada Pollution Probeeurocent/kWh20.0018.0016.0014.0012.0010.008.006.004.002.000.00be the only electricity product thatresidential customers can switch to(industrial consumers can choose otherproducts as well). This has opened newmarkets for retailers that could only servecustomers in their own service area, and ledto the above-mentioned intensive marketingactivities, with power retailers trying to attractas big a share of this new market as possible[MEZ 2001b]. A gradual increase of the energytax has only helped these developments (seeTable 3.8), bringing green electricity pricesclose to those of conventional products, withsome retailers even undercutting currentrates since early 2002. In addition, greenpower products are offered by establishedenergy companies so that most customers donot have to switch providers in order to buya green energy product. Finally, the market issupported by a media campaign launched bythe World Wildlife Fund, a well-knownglobal environmental organization. This wasvery important at the beginning, when noother mechanisms to support green powercredibility were available, and continues tobe so as products complying with WWF’scriteria are allowed to carry the popularWWF logo [NOVEM 2002].1.831.658.832.062.731999 2000regulated2.915.8310.25 10.112001regulated2.092.734.510.592.855.834.214.69 4.42000restructured2001restructuredFigure 3.18 — Evolution of the Dutch Electricity PriceDue to Rising Ecotax (REB) Rates [MEZ 2002a, p. 46] Note:So far, only 63% of the market has been restructured. Theremainder will follow by January 2004. Tax rates are averagedbetween small and large consumers.Table 3.8 — Evolution of the DutchEnergy Tax [MEZ 2002b]Year Tax paid by small consumers(up to 10,000 MWh per year)in €cent/kWh1998 1.351999 2.252000 3.722001 5.842002 6.01Demand has also been driven bygovernment procurement. Four ministriescover their entire energy consumption withgreen energy. As part of a national strategy toachieve carbon neutrality, the Dutchgovernment plans to purchase green powerto meet 50% of the public sector’s electricityneeds during 2002–2004. However, asmentioned before, the most importantmarket driver is the tax exemption for greenpower purchases — green power customersare exempt from this levy. Exemptions fromthe Regulating Energy Levy (REB) are grantedthrough an electronic certificate trading system.Each green power producer is eligible forgreen certificates (availablefor 1, 10, 100 or 1,000 MWhof electricity produced),which are further discussedin the section on green tags(see chapter 5). IntroducedVATin 1997, the levy hasREBMetering Tariffincreased substantially eachDelivery Tariff year since then, particularlyGeneration Price for small consumers usingless than 10,000 kWh/year.Figure 3.18 shows the priceevolution of electricity as afunction of REB increases.Together with the productioncredit, the levy has made46