Green Power Marketing in Retail Competition: An Early Assessment

LBL and NREL recently released this study on green power marketing that finds that the green marketplace is still in an early stage of development with no clear indication of its ultimate size.

The study examines experiences to date with green marketing programs in states across the country. Among the findings:
– pilot programs which include green products are philosophically supported by consumers, but fail to attract real buyers when consumers are asked to switch to green suppliers;
– where markets have been fully opened to competition, green marketers provide a superior quality product over pilot programs;
– disclosure of resource mix is a key element of consumer interest in green products; and evaluating green market demand is difficult.

The abstract  is shown below, and the entire report
can be downloaded at either of these two sites:

LBL’s Electricity Markets & Policy website:
http://eetd.lbl.gov/ea/emp/emppubs.html

DOE’s Green Power Network website:
http://www.eren.doe.gov/greenpower

——————————

Green Power Marketing in Retail Competition: An Early Assessment

(report #  LBNL-42286,    NREL/TP.620.25939)
Ryan Wiser LBNL,    510-486-5474; rhwiser@lbl.gov
Jeff Fang, Kevin Porter, and Ashley Houston,  NREL

February 1999

ABSTRACT

Green power marketing—the business of selling electricity products or services based in part on their environmental values—is still in an early stage of development. This Topical Issues Brief presents a summary of early results with green power marketing under retail competition, covering both fully competitive markets and relevant direct access pilot programs. The brief provides an overview of green products that are or were offered, and discusses consumers’ interest in these products. Critical issues that will impact the availability and success of green power products under retail competition are highlighted. Some of the key observations and conclusions of the work include:

Experience from pilot programs in New Hampshire, Massachusetts, and Oregon—while insightful in many respects—should not be broadly generalized. The direct access pilot programs in these three states all included green marketing. Yet only a fraction of the green products were differentiated based on their renewables content, and the environmental quality of many of the products has been questioned. Because of the nature of pilot programs, however, there are limits to what can be learned from these experiences.

Green power markets have developed in all four states currently open to full competition. Experiences in the more fully competitive markets of California, Massachusetts, Rhode Island, and Pennsylvania provide a more realistic test of green marketing. These markets have only been open for a short time, and each differs substantially. Green power marketing is occurring in each market, however, and a total of 20 green power products have been launched. All of these products have been differentiated based on their renewables content, and 60% of the products include commitments to incorporate some new renewables over time. While concerns remain over the environmental and resource content of some products, overall product quality is superior to that seen in the pilot programs.

The availability and success of green power products will hinge on several factors, including the regulatory rules and public policies established at the onset of restructuring. Differences among the markets discussed here can largely be traced to the design of specific market rules and public policies, particularly the default generation price offered by incumbent utilities. For the green market to succeed, regulators and policymakers will have to develop market structures, rules and policies in ways that are at least neutral to, and perhaps even support, this emerging new market. Surprisingly, market rules that promote vigorous price competition and overall customer switching appear especially important.

Environmental disclosure requirements and certification programs may also play an important role in the success of green power markets. Given ongoing concerns about the credibility and environmental value of some of the green power products, customer information requirements and credibility-enhancing programs may be critical.

Evidence to date shows that green products have had some success in markets newly opened to competition. Niche markets clearly exist for green power. Residential demand has been most prominent, though nonresidential demand has been more significant than many expected. Nonetheless, it will clearly take time for the green market to mature, and there remain legitimate concerns about the ability of customer-driven markets to support significant amounts of renewable energy. Unfortunately, there is currently insufficient data with which to predict the long-term prospects for green power sales with any accuracy.

Emerging Transmission Market Segments (IEEE Article)

The article cited below is from the January issue of Computer Applic in Power, and for non-subscribers interested in T&D issues, it happens to be available in its entirety on the IEEE website: http://teaser.ieee.org/pubs/mags/9905/rahimi.html

I thought you might find it useful as an overview of the various ways transmission systems are being organized around the world.

>>>>>>>>>>>>>>>>>>>>>>>>>>
Who’s coming to the IEEE PICA Meeting in Santa Clara this month (May 17-20)??

Let me know, and maybe we can get together, or at least say hello at the conference.
Complete details available at: http://www.pica99.org
>>>>>>>>>>>>>>>>>>>>>>>>>>
Remember QuickStab? (UFTO Note March 22) Dr. Savalescu will be at PICA, and would be pleased to offer a private demonstration. Give him a call!
>>>>>>>>>>>>>>>>>>>>>>>>>>
(I just joined IEEE, and am beginning to appreciate the wealth of information it provides to the power industry.)
>>>>>>>>>>>>>>>>>>>>>>>>>>
IEEE Computer Applications in Power January, 1999 Volume 12 Number 1 (ISSN 0895-0156)

Meet the Emerging Transmission Market Segments
Farrokh A. Rahimi & Ali Vojdani

Around the globe, the electric industry is undergoing sweeping restructuring. The trend started in the 1980s in the U.K. and some Latin American countries, and has gained momentum in the 1990s. The main motivation and driving forces for restructuring of the electric industry in different countries are not necessarily the same. In some countries, such as the U.K. and the Latin American countries, privatization of the electric industry has provided a means of attracting funds from the private sector to relieve the burden of heavy government subsidies. In the countries formerly under centralized control (central and eastern Europe), the process follows the general trend away from centralized government control and towards increased privatization and decentralization. It also provides a vehicle to attract foreign capital needed in these countries. In the United States and several other countries where the electric industry has for the most part been owned by the private sector, the trend is toward increased competition and reduced regulation.

This article presents an overview of the evolving structural models and the main structural components of the emerging deregulated electricity industry. An analysis of the central structural components, namely the independent system operator (ISO) and the power exchange (PX), is provided and used as a basis for structural classification with a view to the supporting computer application needs.