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SUMMARY
INTRODUCTION Datamonitor's 'Winning the Green Energy Customer" report gives strategic and competitive insight into how specific utilities have gone beyondthe niche market and developed mainstream green tariffs at an economical cost. It therefore provides practical advice on how to emulate the best inclass, with forecasts on how the market will grow to 2008. SCOPE OF THE REPORT - Evaluation of the potential market size for green energy in Austria, Finland, Germany, Ireland, Sweden, and the UK.
- Country by country profiles on specific barriers and potential drivers for the market.
- Best practice profiles of nine utilities in various stages of green customer penetration to re-start green programs & break out of the nichemarket.
- Country-by-country forecasts of green energy uptake in the next five years, including a high and a low scenario.
REPORT HIGHLIGHTS Datamonitor finds that the marketing rules for traditional energy supply do not apply to green energy an essentially emotionally driven product andthis has led to green energy remaining a niche market. Utilities must re-address the customer mindset, product features, personal rewards, & thefinancial implications to succeed. Datamonitor's high scenario forecast predicts that green tariff uptake in the profiled countries will reach 7million (8.5%) by 2008. However, unless utilities learn from best practices then we are likely to see the low scenario uptake of 2.0%.Factors such ascultural receptiveness to green related issues, government,& price are taken into account KEY REASONS TO BUY THIS REPORT - Capitalize on the undeveloped green market to improve customer retention, loyalty, profitability, and brand equity.
- Learn the key drivers and barriers to development of green tariffs in your market and how it will grow by country to 2008.
- Emulate the demonstrated best practices for the proposition, marketing, advertising and sales to break out of the niche market.
TABLE OF CONTENTS
CHAPTER 1 EXECUTIVE SUMMARY 3- Introduction 3
- Market context 4
- Country profiles 4
- Best practice customer acquisition of the green customer 5
- Future of the green energy market 6
CHAPTER 2 MARKET CONTEXT 16- Introduction 16
- Key findings 17
- What is green energy? 17
- The importance of green energy 18
- Market size - evaluating the green customer base 20
- Summary - cultures of environmental responsibility 26
CHAPTER 3 GREEN ENERGY COUNTRY PROFILES 32- Key findings 32
- Austria 32
- Finland 35
- Ireland 41
- Sweden 43
- United Kingdom 45
- Summary 48
CHAPTER 4 BEST PRACTICE CUSTOMER ACQUISITION OF THE GREEN CUSTOMER 52- Key findings 52
- Profile highlights 52
- Introduction 54
- EWEB - 4% penetration with $50,000 budget 54
- SMUD - breaking the dark green barrier 61
- Green Mountain - differentiating the light from the dark green 68
- Oekostrom - cracking an immature market 71
- SRP - experience and ideals: bridging the say-do gap 73
- Enmax - tangible benefits from green energy 78
- Pacificorp - low but fast growing uptake 81
- Cogas - building customer relationships through green tariffs 86
- NaturEnergie - the pro-active utility 89
- Lessons to learn: attracting attention and interest 92
- Getting people to say yes 94
- Messages that do not work 96
- Conclusions for best practice 97
CHAPTER 5 FUTURE OF THE GREEN ENERGY MARKET 98- Introduction 98
- Key findings 99
- Comparator markets to green energy 100
- Scenarios for the future of green energy - high and low growth potential 102
- Low scenario uptake of green energy to 2008 110
- High scenario uptake of green energy to 2008 113
- Conclusions 115
CHAPTER 6 APPENDIX 118- Definitions 118
- Bibliography 118
- Future readings 118
- Relevant links 118
- SPP writing team 118
- How to contact experts in your industry 119
LIST OF TABLES- Table 1: Indicative targets for renewable electricity (RES-E) for member states in the European Union 19
- Table 2: The number of energy-saving measures people currently take, and intend to take in future, in the Member States of the European Union 23
- Table 3: Would you be prepared to pay more for energy produced from renewable sources than for energy produced from other sources? 24
- Table 4: When you decide to buy a new one, please tell me whether you pay attention to the energy it uses or not - yes answers 25
- Table 5: Recycling rates for municipal waste in Europe 26
- Table 6: Breakdown of customer groups in the Netherlands by key driver in switching considerations 29
- Table 7: Potential market size of residential green market in Europe 31
- Table 8: Market penetration of green energy in Europe 48
- Table 9: Utility executives' views on the importance of green tariffs to various elements of the overall supply proposition 49
- Table 10: Indicative savings through improved retention on the green energy tariff - a business case for marketing support 50
- Table 11: Cluster targets for marketing by lifestyle profile - SMUD 66
- Table 12: Positive and negative considerations of the market structure upon customer uptake of green energy in the Netherlands 105
- Table 13: Summary of scores: high and low scenarios for influence of market rules upon green energy uptake 107
- Table 14: Consumer understanding and acceptance of green power - high and low scenario assessments of green culture development 108
- Table 15: "Would you be prepared to pay more for energy produced from renewable sources than for energy produced from other sources?" 109
- Table 16: High and low scenario scoring for the willingness to pay extra for renewable energy 109
- Table 17: Low scenario uptake of green energy by 2005 111
- Table 18: Five-year forecast of residential green tariff uptake in Europe - low scenario 112
- Table 19: High scenario uptake of green energy by 2005 113
- Table 20: Five-year forecast of residential green tariff uptake in Europe - high scenario 114
- Table 21: Summary of forecast customer numbers, high and low scenario 116
LIST OF FIGURES- Figure 1: Inputs to the forecast methodology - high and low scenarios to 2008 6
- Figure 2: Breaking out of the dark green customer segment - a long-term project 7
- Figure 3: In respect of energy, what do you think the two first priorities for the government should be? (Max. 2 answers) 21
- Figure 4: Assessment of the depth of an environmental culture in Europe 27
- Figure 5: Summary of scores by country for the indicators of a culture of environmental receptiveness 28
- Figure 6: Propensity for various customer segments to switch to green energy in the Netherlands 30
- Figure 7: Barriers and drivers for the development of residential green energy markets in Europe 51
- Figure 8: EWEB's WindPower rates 56
- Figure 9: Growth in EWEB WindPower customer numbers 58
- Figure 10: Uptake by windpower percentage was greater than research indicated prior to WindPower launch 59
- Figure 11: SMUD's channel targeting strategy for GreenEnergy 64
- Figure 12: A sales and marketing calendar was used to ensure continuous brand awareness throughout the year, in particular through mail shots 65
- Figure 13: Customer uptake of GreenEnergy - 5% penetration with a $203,000 annual budget 66
- Figure 14: Residential switching in Texas - an immature market 68
- Figure 15: Clarity of message - effective advertising from Green Mountain Energy 70
- Figure 16: Mental map of customers' ideal experience of a renewable energy program in Arizona 75
- Figure 17: Closer matching of ideal and actual / expected experience amongst EarthWise participants than non-participants 76
- Figure 18: Motivational segmentation of customers by participants and non-participants 77
- Figure 19: Greenclub tangible benefits with Enmax's Greenmax tariff 79
- Figure 20: How do customers sign up to Greenmax? 80
- Figure 21: Pacificorp acquisitions by sign-up channels - outbound sales being re-considered for cost reasons (May 2003) 85
- Figure 22: Creation of the NaturEnergie supply brand 90
- Figure 23: Developing green markets must ensure advertisements are familiar and make renewable energy a more tangible option 93
- Figure 24: Best practices: the message, the call to action, and ongoing involvement in the programme 97
- Figure 25: Inputs to the forecast methodology - high and low scenarios to 2008 99
- Figure 26: Penetration of the bottled water market in Europe 101
- Figure 27: Green energy uptake - an S-curve development as marketing breaks out of the eco-niche 102
- Figure 28: Positive and negative considerations of the market structure upon customer uptake of green energy - low scenario 104
- Figure 29: Positive and negative considerations of the market structure upon customer uptake of green energy - high scenario 106
- Figure 30: Five-year forecast of residential green tariff uptake in Europe - low scenario 112
- Figure 31: Five-year forecast of residential green tariff uptake in Europe - high scenario 114
- Figure 32: High forecast by customer numbers - ROI through scale? 116
- Figure 33: The green market - a sustainable profit future 117
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