News on 10 October 2000

More pressure on energy prices to come

Last week, the Government called for an increase in the proportion of 'green' electricity produced in the UK.

DTI secretary Stephen Byers wants UK generators to treble their use of wind power and other renewable sources within 10 years. Overall, the Government wants the proportion of electricity generated from such sources to rise from the current 3% to 5% by 2003 and 10% by 2010.

Power companies will eventually face financial penalties if they do not raise the extent of their output generated from these alternative sources.

But is this what power consumers want?

Market researchers at Datamonitor are not so sure. Fourteen major suppliers already offer their consumers the option of buying green electricity - at a premium price – an offer that has not been widely taken up.

In the Datamonitor survey, well over half of UK power consumers said they would be willing to pay a premium for green energy. However, the number of customers currently on a green tariff does not reflect this. That number is less than 1% of the UK's potential customer base. By comparison, the figures are far higher in both Germany and The Netherlands.

Elliott Chase

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