Abstract
In liberalized electricity markets, suppliers are offering several kinds of voluntary green electricity products marketed as environmentally friendly. This paper focuses on the development of these voluntary markets at household level in the UK, Germany and Finland. Since there are already existing renewable energy policies regulating and encouraging the use of renewable energy, it is important to consider whether voluntary products offer real additional benefits above these policies. Problems such as double counting or re-marketing hydropower produced in existing plants are identified. According to our study, the demand varies between countries: in Germany the number of green electricity customers has increased and is also higher than in the UK or Finland. Typically the average additional cost to consumer from buying green electricity product instead of standard electricity product is in the range of 0-5% in all studied countries, although the level of price premium depends on several factors like electricity consumption. Case study of Finland and literature show that the impacts of green energy are not solely environmental. Renewable energy can benefit local public policy.
Highlights
Liberalization of electricity markets has made it possible for customers to choose their electricity supplier and product freely according to their preferences
Electricity production is a significant source of greenhouse gas emissions causing climate change and its environmental aspects are taken into consideration by many customers
This study focuses on green electricity markets in three European countries: the United Kingdom, Germany and Finland
Summary
Liberalization of electricity markets has made it possible for customers to choose their electricity supplier and product freely according to their preferences. Suppliers are offering differentiated products in order to better meet consumers’ preferences and environmental aspects are used in marketing in addition to competition only on price. Several kinds of voluntary green electricity products are available for customers nowadays. Finland is viewed in more detailed case study including Vaasa and Joensuu. These case studies indicate that energy technology markets might proceed easier than renewable electricity markets. The benefits of the energy technology business in Vaasa and lower heating costs in Joensuu benefit the local economy which benefits local public policy in the area
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