The Netherlands is a rare example of a country where consumers have a high willingness to pay for green power and a correspondingly high enrolment in green tariffs. By the end of 2014 64% of Dutch consumers had a green power contract for their electricity. This is by far the highest recorded enrolment out of any country in the world. It’s closest rival, New Zealand which has a large amount of renewables generated anyway, only has 26% of consumers enrolled. Despite this apparent success, renewable energy still comprises a small proportion of the total energy generated in the country. This case study will look at several of the factors which have driven the increase in households purchasing green electricity, before engaging in a discussion on whether these trends are uniquely Dutch, whether the program has been a success, and whether there are lessons which can be learned for other countries looking to support a demand side policy.
In a recent moment of procrastination I found myself on the product accreditation page of the Vegetarian Society and was intrigued by one of their requirements, that all products must be free from genetically modified organisms (GMOs). This seemed interesting as not even the Vegan Society goes this far – it only excludes GMOs which contain animal genes or animal derived substances. This got me thinking, why should the vegetarian society accreditation, which exists to help vegetarians avoid foods containing meat, care at all about whether the product contains GMOs? After all, if the world was to start eating less meat for both ethical and environmental reasons, GMOs would be a great way to both increase the yield of crops and to create meat substitute products.
The recent provisional findings from the Competition and Markets Authority (CMA) investigation into energy markets includes the less than shocking revelation that SMEs overpay for their utilities. It found that most micro-businesses overpay for their energy usage and that 45% are on default tariffs that they had never negotiated with their suppliers. Consequently, suppliers are free to set high prices and enjoy profit margins of 8%, which are exorbitant compared to the 3% in domestic markets. Why does this appear to be the case? In this post I’ll be exploring some of the arguments made in the provisional CMA report as well as reflecting on my own experience running a small business and switching our electricity provider.
As has been pointed out by many commentators in the past few weeks, now is a time for the Lib Dems to engage in some protracted soul searching. This is our eat, pray, love moment if you will. The familiar camps of the liberal left and the orange bookers will be out in force trying to assert which direction would be best for the party. Potential leadership candidate Tim Farron has even reportedly considered rebranding the party with a new logo and colour. While the new colour and logo would no doubt be a disaster, if it were to change then green would be a solid option.
Last week I wrote a post that looked at the effect of standing charges on consumer understanding of energy tariffs. Standing charges are set daily fees that consumers pay regardless of their actual energy usage. I argued that eliminating standing charges is the best possible way to simplify energy tariffs. This would make switching easier for consumers and would lead to a better deal for low-energy consumers. Today I will take a different approach to the issue and will focus on the inter-relation between energy efficiency and the standing charge. As far as I can tell this issue is too boring for any academic research to have been undertaken, so the statistics here are based on my own calculations from Ofgem data. Continue reading “Standing charges – the hidden enemy of energy efficiency”
I figure that nobody reads this blog anyway so what’s the harm in devoting a post to a dull but rather important issue; the simplification of energy tariffs in the UK. As I noted last week, this is a commitment in the Labour Party manifesto, although one which is left unclear as to how exactly simplification could occur. Under OFGEM’s recent retail market reforms the tariffs that energy providers can offer have been limited in number and simplified in format. Each retailer can now only offer four types of tariff and each one needs to be clearly displayed with the unit price, standing charge and ‘tariff comparison rate’. I will argue here that the most effective further simplification of tariffs would be to abolish the standing charge.
Price comparison sites have grown hugely in the past few years. There have been expensive advertising campaigns to try and differentiate among several websites that are all almost identical in functionality. Recent research by Consumer Futures finds that 52% of consumers have switched or purchased directly through a price comparison website. Despite their growth there has been little research done to examine how beneficial they are for consumers, how they should be regulated and how sustainable the business model is likely to be.