# Presentation: 776267

## The Outlook for Green Power Markets in the United States

**The Outlook for Green Power Markets in the United States**

**Blair Swezey**
**Principal Policy Advisor   **
**National Renewable Energy Laboratory**
**Golden, Colorado**

## Definitions

**Green Power**
**No legal definition.**
**Accepted definition: an electricity product with a high fraction of renewable energy content ****—**** most products are, in fact, 100% renewable energy.**
**Green Power Marketing**
**The act of selling green power, generally used to describe competitive marketing (retail and wholesale).**
**Green Pricing**
**Green power programs or tariffs offered by utilities.**
**Renewable Energy Certificates**
**Separation of the renewable energy attributes from the physical electricity product.**

## Origins of Green Power Marketing

**Utility Green Pricing Programs**
**Allow utility customers to voluntarily fund renewable energy projects that are not “cost effective” under integrated resource planning.**
**Electricity Restructuring**
**Retail competition will bring alternative suppliers and product choices to electricity consumers.**
**Some marketers will want to differentiate their products based on environmental attributes.**
**More utilities will offer green pricing to prepare for competition or because of the threat of competition.**

## Growth in Utility Green Pricing Programs

**As of September 2002**

## Slide 5

## Slide 6

## Significant Amounts of New Renewables are Being Supported by Green Power Demand

## Slide 8

## Study Purpose

**Introduction of customer choice in domestic electricity markets provides a new but untested approach to increasing renewable energy development.**
**Quantify the potential size and impact of the green power market.**

## Study Approach

**Review green power market research and marketing experience.**
**Identify variables that will help determine market size and the rate of market development.**
**Examine the experiences of other industries that have undergone “deregulation” or that sell products with a high degree of environmental or health-related content.**
**Develop a model to forecast green power market growth based on incorporated assumptions. **

## Green Power Forecast

**10-year forecast of U.S. green power demand**
**High growth scenario**
**restructuring proceeds with little delay**
**market rules conducive to competition (switching)**
**consumer acceptance of green power is high**
**green power premium continues to decline**
**Low growth scenario**
**introduction of customer choice is delayed**
**market rules deter competition, switching**
**consumer acceptance of green power grows slowly**
**green power premium remains at current levels**
**Both scenarios are plausible**

## Forecast Inputs

**State level forecast of residential loads to 2020**
**Pace of restructuring, by state**
**Green power market access, by state**
**Separate assumptions for regulated and restructured markets**
**Residential green power market penetration**
**Non-residential demand as percent of residential demand**
**Green power product quality**
**% total renewable**
**% *****new***** renewable**
**Start with known conditions**

## Newly restructured markets
long distance telephone service
natural gas

**Case Studies of Other “Green” Industries**

- Newly restructured markets
- long distance telephone service
- natural gas

- Other green products
- bottled water
- organic food
- socially responsible investing
- sustainable forestry products
- contributions to environmental organizations
- recycling
- compact fluorescents

## ResultsRenewable Energy Capacity Supported by Green Power Demand

## Key Sensitivities

**Pace of Restructuring and Green Power Access**
**Green Power Product Content**
**Green Power Penetration Rates**

## Sensitivity Scenarios

## Key Market Determining Factors

**Customers must have widespread access to aggressively marketed green power products, whether in restructured or regulated markets.**
**Currently, only 40% have access from their retail provider**
**The leading utility programs have achieved participation rates of 3% to 5%, but more than half are at <1%.**
**Widespread customer education is needed on the merits of exercising green product choice.**
**Green power premiums must be reduced.**
**Innovation in green power products and marketing strategies would likely increase the pace of market development.**

## Key Market Determining Factors (Cont.)

**Public policy measures can directly or indirectly assist the market**
**Direct measures**
**Green pricing requirements**
**Customer incentives for green power purchases**
**Grants to green power marketers and aggregators**
**Education and marketing campaigns**
**Indirect measures**
**Tax incentives and grants that reduce the cost of renewable energy generation**

## Emerging Opportunities Identified

**Customer Aggregation**
**Large Customer Demand**
**Renewable Energy Certificates**

## Green Power Market Status - 2002

**Green power marketing expanded to 5 new states**
**IL, MD, NY, TX, VA (and DC)**
**13 utilities announced or implemented new green pricing programs**
**some driven by state legislative requirements**
**About a dozen companies are active in the renewable energy certificates market.**
**Nearly 400,000 customers are now purchasing green power with customer retail access at about 40% nationwide.**

## Slide 21

## Growth in Utility Green Pricing Programs

**As of September 2002**

## Emerging Market Trends

**The green power market is expanding beyond individual utility service territories and state market borders through the creation, trading, and sale of renewable energy certificates.**
**The Center for Resource Solutions has established   certification criteria for tradable renewable energy      certificates (TRCs) through its *****Green-e***** program.**
**Increasing use of marketing/business partnerships**
**Oregon IOUs (w/Green Mountain Energy)**
**NiMo and NYSEG teaming with green power marketers**
**Community Energy (w/Exelon)**
**Green Mountain Energy/APPA**
**SMUD/Starbucks/Jamba Juice**

## Non-Residential Purchases

**Increased purchases by non-residential customers**
**Examples:**
**Businesses (Toyota, Kinko’s, etc.)**
**State and municipal government purchases**
**MD (initially 6%, increased to 20%)**
**NJ (12%)**
**NY (10% by 2005, 20% by 2010)**
**PA (5%)**
**Chicago + 48 local agencies (20% = 80 MW by 2005)**
**Seattle (5% = 175 MW by 2004)**
**Federal agencies**
**Colleges and universities**
**84 corporations and institutions have joined the Green Power Partnership, representing >530,000 MWh (60 aMW) per year.**
**Non-residential purchases account for nearly 1/3 of total utility green power sales among utilities.**

## The AAA of Green Power Marketing

**Access**
**Competitive markets**
**Utility programs**
**Renewable energy certificates**
**Appeal**
**Is it a good product?**
**What other values are attached?**
**Awareness**
**Even the best products will not be purchased if consumers are not aware of them.**

## http://www.eere.energy.gov/greenpower

**The *****Green Power Network***** is a nationally recognized Internet source for green power data and analysis. Information is available on green power markets, utility green pricing programs, and renewable energy certificate providers. Links are provided to green power providers, product offerings, and relevant analysis products. **

**http://www.eere.energy.gov/greenpower**