Renewable energy market potential in U.K.

Energy is crucial to our daily lives and to the needs of business and industries. Affordable, sustainable and reliable energy supplies are key objectives of the government´s energy policy. But now a days Green electricity (GE) is a generic term for electricity generated from clean, environmentally preferable energy source. Over the last twenty years following privatisation the current energy policy frame work combining competitive energy markets and effective, independent regulation has been serendipitously successful in meeting the government´s goals in terms of the environmental policy as carbon and other emissions were reduced as cleaner, more efficient gas-fired generation replaced coal generation and investment were made to reduce emissions from remaining coal- fired plant. But recent experience has led to questions as to whether we can continue to rely on a policy based on energy markets. Because, wholesale and retail energy prices have risen significantly and remain high and volatile, impacting on industrial competitiveness and fuel poverty. Carbon emission has started to rise as generators increase output from coal fired station in response to rising gas prices [1]. Since 1999 GE has been available to all customers in the UK. The market has had positive beginnings with almost all electricity suppliers offering a green electricity product. Marketing has been launched and consumers are beginning to make the switch to green electricity despite the premium charged. An accreditation scheme guarantees that the green purchases match power entering the grid. For supply side, the government also introduced the Renewable Obligation in 2002 as part of its strategy to cut carbon dioxide emissions. This places an obligation on energy suppliers to source an increasing proportion of their consumer demand from renewable energy however the demand side of the sector also has a significant role to play in reducing emission. For business customers, the Climate Change Levy on - - gas and electricity bills in 2001 has been introduced and companies were allowed an 80% discount on the levy if they signed Climate Change Agreements. The government estimates that these two programmes working together will save 6.2 MtC per year in 2010. For domestic customers, the government also introduced the Energy Efficiency Commitment (EEC), an obligation on gas and electricity suppliers to increase the efficiency of the energy use of their domestic customers [2]. The UK government has committed to a number of international and domestic targets and goals to reduce emissions of greenhouse gases which contribute to a climate change. In international agreements, the UK has made two ambitious commitments, which are not legally binding: To reduce emissions of carbon dioxide to 20% below 1990 levels by 2010 and to put the UK on a path to reduce carbon dioxide emissions by 60 % compared to 2000 levels, by 2050 with real progress by 2020. With the present energy markets, Utilities Bill and Climate Change Levy, despite aiming to support renewable energy are introducing a number of uncertainties to the market. In this paper we will try and discuss as to how barriers to this potential markets renewable energy can be overcome through government policies.