Abstract
In this paper, we study the responses among households to the promotion of renewable electricity. We analyse an experiment conducted by a Norwegian power company that offered Guarantees of Origin of supply to 5,000 of their customers. In the experiment, five different groups of 1,000 customers each received information about a renewable electricity certificate and how to purchase it. The information and the reasons given for why the customers should accept the offer was framed differently to each of the groups. The experiment produced minimal responses, and we use material from focus group discussions and in-depth interviews for interpreting and explaining the results. The analysis shows that customers tend to disregard information coming from their supplier, while there is also a low degree of commensurability between the message presented in the information and the understandings and perceptions held by the customers. For example, whereas the information contained the argument that customers must purchase certificates to obtain renewable electricity, Norwegians, because of their awareness of the country’s hydro-based production system, perceive electricity to be renewable as it is. Additionally, focus group participants found the presented terms and figures to be incomprehensible to the extent that the information can be said to have produced ignorance in them. In turn, this negatively affected people’s trust in the message and also its sender, as relevance and reliability are disclosure’s main challenges in Norway. We use the case of electricity labelling in Norway to demonstrate some of the general challenges associated with using information as a tool for changing people’s consumption patterns in deregulated energy markets.
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Notes
Eikeland holds that “a basic normative assumption underpinning any system of marketbased trading is consumer sovereignty—supply of goods and services are supposed to be driven by consumer demand. Indeed, both the UK 1989 Electricity Act and the Norwegian 1990 Energy Act state the major responsibility consumers have for choosing energy-efficient end-use solutions” (Eikeland 1998, 922).
A third example are the Green Certificates which obligate suppliers to ensure that a certain percentage of the electricity they distribute (or generate or use, cf. Farinelli et al. 2005) comes from renewable sources. This measure is notably different from the labelling regime under study which only requires that suppliers provide information about their fuel mix to the customers.
No fees are charged and a simple system for shifting supplier is in place.
Commercial actors may be motivated to purchase renewable electricity in order to be able to label their own products as renewable, thus creating a competitive advantage.
A GO is a certification that 1 MWh is produced during a specific time period from a certain production unit, from renewable non-fossil sources such as wind, solar, hydropower, biomass, etc. EU Renewable Energy Directive 2009/28/EC.
One example of the way Norwegian suppliers are obliged to use words that are hard for customers to grasp: Instead of being allowed to say, “By purchasing this certificate, your electricity will be guaranteed renewable”, suppliers must make a more complicated statement, as exemplified in treatment B: “If you choose this certificate, we guarantee that an amount of renewable power equal to the amount you purchase is produced.”
To estimate the amount of CO2 emissions associated with the category “unknown”, NVE uses the number 374.6 g/kWh, which is based on a mix of European power production as defined in Eurelectric Power Statistics 2010. www.eurelectric.org
http://www.konkurransetilsynet.no/no/kraftpriser/Informasjon-om-leverandorer/ Accessed in May 2011.
In this northern region electricity customers are exempted from taxes (29 %), and their monthly bill for energy and transport amounts to approximately 172 EUR/1,300 NOK per month. The calculation is based on the average electricity costs (energy and transport, excluding tax) of households in Norway in 2010: 9 EUR cents/0.744 NOK/kWh (SSB: http://www.ssb.no/emner/10/08/10/elkraftpris/arkiv/tab-2011-01-11-02.html). The average annual consumption among Barents’ household customers in 2008 was 22,000 kWh.
Customers with electronic payment do not receive paper issued invoices sent by mail, but could see the same information by opening a PDF document. Customers with “auto invoice” (suppliers can withdraw the amount from the customer’s account automatically) received paper-issued copies of invoices as well as attachments by ordinary mail.
If we include the 109 who had already purchased the certificate at the time of the experiment, 122 (1 %) of Barents’ domestic customers had joined this renewable programme since it was launched.
Indicative of the close relationships that exist in Kirkenes, many focus group participants recognised and knew the person who appeared in a photo in treatment E, “We have children in the same kindergarten.”
Discussions about what terms to use in marketing material are ongoing within the electricity sector. For example, in November 2011 the director of the interest organisation Energy Norway criticised the supplier For Better Times for misleading their customers when telling them that they would receive their electricity from “dirty German coal power plants” if they did not purchase electricity with Guarantees of Origin. The director also asserted that “electricity use in Norway remains without emissions”, thus in effect undermining the whole concept of GOs and electricity labelling. http://www.energinorge.no/energi-og-klima/fornybar-stroem-og-opprinnelsesgarantier-article8951-437.html, accessed in June 2012.
Such lists exist in a range of European countries, e.g. in Denmark, Sweden, the UK and Austria. See for example the following links (all accessed in June 2012): Denmark: http://www.elpristavlen.dk/ Sweden: http://www.elpriskollen.se/ UK: http://www.greenelectricity.org/domestic.php. In the UK there is also an overview of the fuel mixes of all suppliers: http://www.electricityinfo.org/suppliers.php.
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Acknowledgements
We wish to thank the editor and three anonymous reviewers for providing their highly valuable comments and suggestions. The paper is a result of the interdisciplinary research project, “Do information programs influence household electricity consumption?” (2009–2011), which was financed by the Research Council of Norway (project no. 190769/S60). We wish to thank representatives from the Norwegian electricity sector for their contributions to this work: Kristin Kolseth, the Norwegian Water Resources and Energy Directorate (NVE); Ole Haugen, Energy Norway; Petter Gunnulfsen, Hafslund ASA; Gisle Haakonsen, Norwegian Ministry of the Environment (MD); John Ravlo, ECOHZ AS and, not least, Anne Wikan and May-Brith Østerbøl, Barents Energi AS, who also implemented the experiment and provided the customer data. We also thank participants in the focus groups, Synovate for facilitating these discussions and the people who let us interview them in their homes. We are highly indebted to our project leader Hege Westskog at CICERO, as well as to our other colleagues in the research team, Einar Strumse and Håkon Salen. Finally, Harold Wilhite, Monica Guillen-Royo and Karina Standal at SUM provided valuable comments to earlier drafts of this paper. Maury Saslaff and Connie J. Stultz proofed the English language.
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Winther, T., Ericson, T. Matching policy and people? Household responses to the promotion of renewable electricity. Energy Efficiency 6, 369–385 (2013). https://doi.org/10.1007/s12053-012-9170-x
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DOI: https://doi.org/10.1007/s12053-012-9170-x