De Economist (0013-063X). Dec2003, Vol. 151 Issue 4, p389-413. 25p.
Green technology, Markets, Energy policy, Economic equilibrium, and Electricity
During 2001 and 2002, the Netherlands experimented with a liberal, mainly consumer-oriented policy to stimulate the greening of electricity. As the number of households switching to green energy rose from a very small base at the beginning of 2001 to approximately 1.4 million at the end of 2002, this policy can be considered a major success. Remarkably, as of 2002, the policy also stopped making a distinction between domestic production and electricity generation abroad, a certain type of electricity generation was eligible for a certain type of subsidy, irrespective of the location where that electricity was generated. The darker side of the coin is that the policy was rather expensive. In reaction to this, the Dutch government has chosen to adopt a completely different policy as of July 2003. The essence of the new policy is to reduce the demand-side subsidies and to increase the supply side subsidies, but to limit the latter to newly or recently installed domestic production.