Marketing Green Energy in B2B Markets

Introduction

The recent economic downturn has not eliminated the global trend of growing environmental awareness amongst consumers. Energy consumers in the B2B sector need to respond to the wishes of their own customers by seeking greener energy supplies.

Scope

*An overview of the complicated legal and voluntary schemes shaping businesses' motivation for green energy, with specific reference to the UK example.

*Insight onto the reasons why businesses buy green energy and consumers want clearer, more credible information about what they are buying.

*Detailed information on the nature and characteristics of green energy tariffs in the UK.

*Conclusions and recommendations for businesses and suppliers around green energy supply. Case studies from the UK, Australia, Germany and the US.

Highlights

Mandatory and voluntary schemes regarding green energy in the UK are overly complex. Governments outside the UK tend to be more proactive, but their green legislation is less complex. Renewable Energy Guarantees of Origin (REGOs) are the ultimate certificate in guaranteeing renewable supply in the UK.

Businesses buy green energy mainly for reputation purposes, and despite regulatory and economic changes. Clear and effective certification can help businesses choose green tariffs: Ofgem's Green Scheme has raised the bar for marketing green energy. Green tariffs should provide clear benefits regarding voluntary carbon reporting.

The UK government's message is to consume less and more efficiently, motivating businesses to prefer energy efficiency over green energy supply when tackling climate change. Green energy is still in demand; what has changed is the need for clear, credible proof of green supply. It is not enough to be green, businesses need to show they are green.

Reasons to Purchase

*Understand the B2B green energy market including what green tariffs are offered at the moment, the benefits they provide and where they can improve.

*Support your plans for certification and further best practices in marketing green energy for businesses.

*Gain insight as a business in getting the most benefit out of green supply and understand the mandatory/voluntary schemes shaping the market.


Report Highlights
Mandatory and voluntary schemes regarding green energy in the UK are overly complex. Governments outside the UK tend to be more proactive, but their green legislation is less complex. Renewable Energy Guarantees of Origin (REGOs) are the ultimate certificate in guaranteeing renewable supply in the UK.

Businesses buy green energy mainly for reputation purposes, and despite regulatory and economic changes. Clear and effective certification can help businesses choose green tariffs: Ofgem's Green Scheme has raised the bar for marketing green energy. Green tariffs should provide clear benefits regarding voluntary carbon reporting.

The UK government's message is to consume less and more efficiently, motivating businesses to prefer energy efficiency over green energy supply when tackling climate change. Green energy is still in demand; what has changed is the need for clear, credible proof of green supply. It is not enough to be green, businesses need to show they are green.
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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
Marketing green energy for businesses is about more than addressing environmental concerns 2
Businesses are caught between environmental responsibility and the bottom line 2
The definition of green energy is becoming wider and subject to interpretation 3
The UK's legal framework around green energy is overly complex 4
Certificates from three UK legal schemes shape the green energy market: REGOs, LECs and ROCs 4
LECs are being used as proof of green energy supply 5
ROCs are independent from energy supply 6
Multiple certificates can lead to multiple counting of green energy 7
The Carbon Reduction Commitment Energy Efficiency Scheme is not a green energy incentive system 9
Voluntary guidelines on the UK's green energy supply are not guiding enough 10
Defra's guidelines for carbon reporting provide more incentive for CHP tariffs than for renewable tariffs 10
Ofgem's Green Supply Guidelines do not provide the needed clarity 11
The new Ofgem Green Energy Certification Scheme is welcome 12
Businesses in the UK are buying green energy mainly for reputation purposes 13
Energy efficiency must come before green tariffs when tackling climate change 13
Green energy is still in demand, despite economic and regulatory changes 14
Customers are the main influence on businesses buying green energy 15
Reputation is the main reason why companies go green 16
Companies are raising their profile by buying green energy 17
Case study: BT champions the UK's green energy use, but carbon reporting is still an issue 19
A transparent market for green tariffs would help businesses opt for green energy supply 20
E.ON's EasyGreen is the only business tariff certified by Ofgem's new Green Energy Scheme 20
All stakeholders would benefit from clearer and certified green business tariffs 20
Companies want proof of their green supply to publicly advertise their credentials 22
Case study: Ecotricity would also benefit from certification 22
Outside the UK, governments and certification programs have a more active role in the green market 24
Australia: the ultimate example of successful green energy marketing 24
Germany: legislation and certification are the key for renewable generation growth 25
US: sticks and carrots drive stimulus for green energy development 26
Clarity and certification are essential for effective marketing of green energy in B2B markets 28
Main conclusions 28
Recommendations for businesses and suppliers 29
APPENDIX 30
Glossary 30
Ask the analyst 31
Datamonitor consulting 31
Disclaimer 31
List of Figures
Figure 1: Most renewable technologies get awarded three certificates 4
Figure 2: Energy tariffs providing CCL exemption through LECs declare they are green 6
Figure 3: ROC awarding and pricing is complex 7
Figure 4: Double and triple counting create non-existent green energy 8
Figure 5: Only companies with their own renewable sources can report a zero emissions factor 10
Figure 6: Ofgem's new Green Energy Certified label will hopefully help customers choose green tariffs 12
Figure 7: Businesses prefer energy efficiency to any other carbon reducing measure 13
Figure 8: SMEs have not changed their minds regarding green energy supply 14
Figure 9: UK consumers, and Europeans in general, find that corporations and industry are not doing enough to fight climate change 15
Figure 10: Media and public information can make or break a company's green credentials 17
Figure 11: Buying green energy is an important part of some companies' image and strategy 18
Figure 12: BT's green credentials are impressive 19
Figure 13: Green tariffs for businesses in the UK would benefit from clarity and certification 20
Figure 14: There are currently 4 types of green tariff: renewable, CHP, a mix of the two and other green measures 21
Figure 15: Suppliers should provide businesses with ways to advertise their green supply 22
Figure 16: Ecotricity's promise of a greener Britain is achieved through clear communication and visible wind turbines throughout the country 23
Figure 17: The Australian government has successfully invested in a strong and clear accreditation scheme for green energy 25
Figure 18: When choosing their green tariffs, Germans rely on certification that offers specific information on the source of energy 26
Figure 19: The growing dominance of non-residential green energy sales in the US, mainly through RECs, illustrates the success of marketing green for businesses 27

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