The promotional impacts of green power products on renewable energy sources: direct and indirect eco-effects

Abstract

Green power products may be seen as a means of fostering renewable energy sources because they create and channel consumer demand for environmentally sound power generation. They can therefore be evaluated on a par with other support instruments regarding their effectiveness to connect new capacity to the grid. Apart from this direct effect however, green power products confer a much more active role for customers and utilities. Thus, learning processes, which foster eco-oriented decisions beyond the construction of new renewable generation capacity, may be induced. In the present paper, we provide an encompassing review of the ecological consequences of green electricity products. We examine the direct eco-effects by comparing five European countries in their endeavor to increase electricity generation from renewable energy. The results show that the impact of green power on increasing renewable generation capacity is rather limited. In a second step, we analyze the contribution of green power in stimulating eco-oriented learning. It turns out that green power has particular potential in facilitating simultaneous learning processes involving power producers, traders, suppliers and consumers. We conclude that green electricity can be a crucial complement to governmental energy policies in the mid term. A precondition for reaping this potential is the careful policy design to create synergies in the interaction of regulatory support schemes and the green power market.