Talking Green Energy: Truths And Myths

greenenergyWith the emergence of a competitive, deregulated energy marketplace, most industry insiders not surprisingly conclude that price is the bottom line when businesses choose energy providers. Though it’s hard to argue against the bottom line, another principle is quietly worming its way into the decision-making equation: green power.

Just as the bottom line is difficult to argue against, it’s hard to refute the moral imperative of green power. Taking care of the environment is everybody’s responsibility, but the extent of that accountability is undefined. At what cost should a business concern itself with environmental issues? Certainly contracting for traditional forms of energy is no crime, especially if it saves money. If financial cost is the primary bottom-line consideration, proponents of green power, to truly become mainstream energy providers, must do so on the business world’s terms. Specifically, they must offer energy that is every bit as reliable and cost effective as that offered by traditional utilities.

THE GREEN POLICE

Of the two essential features that must characterize an energy provider’s product–reliability and price–reliability is probably easier to control. Not so much the reliability of delivery, since that is controlled by a state’s independent system operator (ISO) or the utilities themselves, but rather the reliability of a company’s claim that their energy product is in fact derived from renewable sources.

If making sense of deregulation is daunting, so too is sorting out green-power claims and options. One place where end-users can turn for information on green-power energy providers and services is www.green-e.org, which details the Green-e Renewable Electricity Program, a standard created by members of the Center for Resource Solutions (www.irc.org).

Actually, Green-e enforces the certification standards of the Green Power Board for the retail of green-energy products. The Green Power Board consists of a wide variety of industry insiders who have expertise in renewable energy policies, technologies, and marketing strategies. Together, they encourage the use of renewable resources, protect end-users, and promote improvement of the environment.

As part of its mission to accredit energy products, Green-e grants use of its logo for companies to place on their web sites and literature that promotes certified products. Green-e points out that the use of their logo in no way endorses products, serving rather in the same way as the Underwriters Laboratories logo serves as a symbol of certification for electronic products.

To gain the use of the Green-e logo, an energy product must be produced from at least 50 percent renewable sources. If part of the source is fossil fuels, its emissions may not exceed its system power equivalent. Furthermore, the emissions from renewable energy generators that use waste materials for fuel cannot be greater than what would normally be produced by the typical disposal of the waste. Green-e products may not be nuclear in origin, and after one year of deregulation, the product must contain at least 5 percent new renewable electricity. That percentage will increase by 5 percent each year until it reaches 25 percent.

Currently, Green-e has 19 retail and three wholesale products certified on its web site. Certification is completely voluntary, but within the renewable energy community, the feeling is that certification is essential to avoid claims of fraud by the movement’s opponents. To ensure the validity of its own claims, Green-e had the products independently audited after its first year, and all of the products passed.

GREEN COSTS

Green-e can help ease end-user’s doubts about the legitimacy of a specific renewable energy product, but it can’t make it cheaper. “There is relatively little commercial interest in completely renewable energy,” says Diane Sable, spokesperson for PG&E Energy Services, San Francisco, Calif. (www.pgees.com). Clean Choice, PG&E Energy Services’ certified green energy product, is only marketed to residential consumers. If a business desires that energy package, they will make it available, but as Sable points out, “It simply costs too much. There are businesses that see the value of green power from an environmental and marketing standpoint, but not all businesses have that strategy.”

One company that does is Birkenstock. The shoe manufacturer recently signed an energy contract with Green Mountain Energy (www.greenmountain.com) But as Julie Blunden, president of western region for Green Mountain points out, “The vast majority of our clients are residential.”

Green Mountain currently has four green-energy products certified by Green-e–two in the California market and two in the Pennsylvania market. The company offers price comparisons on its web site between its services and regular utility prices. The results are that the greater the amount of renewable resources are used, the more expensive the energy. Products are labeled “good,” “better,” and “best,” with the labels referring to the amount and type of renewable energy in the package. One product, called 100% Renewable Power (labeled “good”), available in the California market, is actually a little less expensive than a conventional utility power, but as the “quality” of renewable energy increases, so does its price. So much so, that a company with a substantial energy load would face exponential cost increases.

One Green-e certified product that is marketed directly to businesses is New West Energy’s GreenValue (www.newwestenergy.com). New West Energy debuted GreenValue in June of 1999, and just signed its first business contract with a retail store chain throughout California. As New West’s current crop of traditional energy contracts expire, the company plans on pushing the GreenValue package to prospective businesses, but it also realizes that due to the increased costs of green power, a business must acquiesce to competitive prices instead of equal prices.

“Green technology is very expensive,” explains Frederick Bermudez, communication strategist for New West Energy, “and if the end-user is willing to spend 10 to 20 percent more for their energy bill, then green energy is an easier sell. In a perfect world, green energy would be the same price or less than brown power. We’re not there yet, but the demand for green power is.”

GREEN PRAISE

Although industry representatives like Bermudez and Sable may disagree over whether or not there is a high demand for the commercial use of green energy, they do agree on one thing: Green-e 15 invaluable. Both praise the efforts of the organization, as well as the California Energy Commission (www.energy.ca.gov), in their efforts to legitimatize the green-energy industry.

The green-power market is essentially a brand new market. Deregulation brought choice, and with the help of Green-e, if end-users wish to purchase green power, they can do so with confidence.

4 thoughts on “Talking Green Energy: Truths And Myths

  1. The price of green power is also based on the duration of the contract. Providers have different price list, as well. The resource geography also matters. So it’s safe to say that the price of green power really varies.

  2. Those who are asking how much green power can cost, it is best to know about the resource type first. Solar, wind and biomass are the usual sources of green power.

  3. I have a strong feeling that an organization that uses green power is more likely to come up with positive publicity. So if I am handling an entity, whether a government agency or a private one, I would prefer this without second thought.

  4. I am for Green Power acquisition because it can help establish civic leadership and can help a lot in making your brand unique.

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