Benchmarks

Fortnightly Magazine - July 15 1998
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BY 2010, SOME $21.8 BILLION WORTH OF EMISSION control technologies will have to be installed at steam-generating plants to reduce emissions of sulfur dioxide and nitrogen oxide.

Increased costs at these plants will boost power prices. These higher costs and higher revenues will increase profits of the five least competitive companies will lose $1 billion.

Power companies must increasingly incorporate environmental factors into strategic planning.

A key component of any environmental strategy begins with a core green marketing program--the ability to sell power with a lower environmental impact than the competition at a competitive cost. This definition is a departure from most existing green marketing programs, which offer renewable generation at a premium. Consumer research into green power finds a small segment of residential consumers are willing to pay a 5 to 20 percent premium for renewable electricity. This segment is a small as 1 percent or as high as 7 percent, depending on the local market and the premium.

A much larger segment, however, is willing to pay up to a 5 percent premium for green power. This segment is as large as 23 to 45 percent of the residential sector. The key to this segment, the "light green market," is the willingness to pay somewhat more for a green product that can be something less than renewable.

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