Policy considerations for a sprouting UK green electricity market

Green electricity (GE) is a generic term for electricity generated from clean, environmentally preferable energy sources. Because of its low-to-zero carbon content, the use of GE is seen as a desirable and important option for the UK's carbon emission reduction strategy. Since 1999 GE has been available to all customers in the UK. The market has had positive beginnings with almost all electricity suppliers offering a green electricity product. Marketing has been launched and consumers are beginning to make the switch to green electricity despite the premium charged. An accreditation scheme guarantees that the green purchases match power entering the grid. While the groundwork has been set for a progressive market to emerge, recent energy policy proposals may undermine the progress made. The Utilities Bill and Climate Change Levy, despite aiming to support renewables, are introducing a number of uncertainties to the market, while the New Electricity Trading Arrangement undermines the growth of some renewables altogether. These uncertainties mean there is some question about where the potential for this market lies. Research carried out by the Environmental Change Institute examines the developments of the UK's GE market; it traces past and present policies and identifies policy options for the promotion of this sector in future.