Lessons for the United Kingdom from previous experiences in the demand for renewable electricity

Liberalisation of the electricity market in 1998 offers an opportunity for a major diffusion of renewable technology. With inelastic supply, demand may be vital for determining the future development of renewable electricity market. This chapter examines previous experiences of the demand for renewable electricity, mainly in the U.S. and in the Netherlands, to draw lessons for the British market and recommendations for the electricity regulator, if it seeks to promote these alternative technologies. This chapter finds that, although small, a niche demand is likely to actually las well as hypothetically) exist for 'green' electricity in the United Kingdom at the usual premium prices charged. Raising awareness and generating confidence amongst customers, as well as keeping price differentials low, are likely to be vital to increasing demand for renewable electricity.