Green Products for Customers

Supply Fuel Mix

Since 1 January 2005 Nuon informs all customers of the fuel mix used to generate power as well as the related CO2 emissions per kWh and the amount of nuclear waste in grams per kWh. From the perspective of sustainability, the supply mix of the Nuon group looked more favourable in 2007 than in 2006.  

This information is summarised in the ‘power label’ that customers receive to enable comparison between different energy providers. As Nuon not only supplies electricity from its own power stations, this label is not identical to the group’s in-house production. In other words, the label shows the supply mix, not the production mix. The supply mix also includes the fuel mixes of the total Dutch production and of the imported power. Various factors influence the supply mix, such as demand (green or grey), in-house production and the traded volume. 

The fuel mix of 2007 shows a striking 12% decrease in CO2 per kWh compared to 2006. Of this, 6% is attributable to the “greening” of the mix and the remaining 6% to the adjustment of the emissions factor for the Nuon power stations that largely generate electricity with furnace gas, a waste product from the steel manufacturing activities of Corus. This furnace gas is used instead of natural gas. Until 2007 the CO2 emission calculation for furnace gas included the CO2 that was already in the gas prior to combustion. After consultation the Dutch Office of Energy Regulation (DTe) and Nuon have agreed to apply a different calculation method which excludes the pre-combustion component. 
Furthermore, the CO2 emissions per kWh decreased because of the increased delivery of green power to customers in Belgium and the business market. In 2007 the traded volume almost doubled, which also had a positive effect on the reported CO2 emissions per kWh. However, this volume did add an amount of nuclear waste to the fuel mix. Though Nuon generates no nuclear power itself, the European nuclear generators do deliver to the market where Nuon purchases power. Even so, the amount of nuclear waste per kWh remained almost equal to the level of 2006. 

Business market

In promoting sustainability among business customers, Nuon tries first of all to assist customers in limiting their energy demand through energy saving. Secondly, Nuon offers its customers the opportunity to opt for sustainable solutions.

In 2007 we saw two major trends. On the one hand the figures show a decrease in the supply of renewable energy; on the other hand, the demand for sustainable solutions grew enormously. The latter is mainly visible in the number of contracts concluded in 2007 for delivery in 2008 and beyond. 

In the large business market Nuon supplies green energy in the form of three products, namely GroenGarant, GreenStep and NatuurStroom. Two years ago Nuon stopped actively promoting the latter two products, so that the delivery of these products decreased strongly compared to 2006 (Greenstep by over 80%, NatuurStroom by about 2%). At the present moment there are still numerous ongoing long-term NatuurStroom contracts, which explains why the decrease for this product is more gradual than for Greenstep. 

GroenGarant was introduced in 2006 to replace Greenstep that is being phased out. This product enables business customers to green their grey electricity consumption. The customers themselves determine what proportion of their grey consumption they want to replace with green power. GroenGarant is a supplementary product with delivery contracts for ordinary energy. In 2007 Nuon GroenGarant was used to green over 291 GWh, representing a substantial increase in the delivery of GroenGarant relative to 2006 (36%).
 
In 2006 an audit of the NatuurStroom accounts revealed that too few Guarantees of Origin (GoOs) had been used for business customers (10.630 GWh). In addition, due to a difference in interpretation, and contrary to the internal product definition, 68.782 GWh of large-scale hydropower had been sourced instead of small-scale hydropower. We promised to compensate the identified variances in 2007. This was done by buying sufficient extra GoOs in 2007 to make up the shortfalls for 2005 and 2006. In this respect it was decided not to buy extra small-scale hydropower retrospectively as the relevant NatuurStroom contracts stipulate that the NatuurStroom must be generated “using clean and renewable energy sources, namely wind, solar or hydropower”. It is not explicitly stated that small-scale hydropower should be sourced. From 2007 small-scale hydropower will be purchased in line with the internal definition, thus ending the use of different definitions for NatuurStroom.

Retail market

Climate change was more in the public eye than ever in 2007. As a result of Al Gore’s film An Inconvenient Truth (2006) and a spate of national and local campaigns, customers are now clearly looking at the environment as well as at price in their choice of energy supplier. At the end of 2007 almost 15% of Nuon’s retail customers in the Netherlands were buying a green electricity product. In Belgium and Germany the market for such products is still in start up phase and the numbers are much lower.

In 2008 Nuon’s policy to make households CO2 neutral will be continued and intensified. This will be done by attracting customers with a combination of (Fixed-Price) NatuurStroom and (Fixed-Price) Gas combined with a Nature Certificate. In 2008 Nuon will also assist its customers green their homes in various ways, including discounts on sustainable and/or energy-saving products.

Nuon has for years offered customers a choice of fixed-price products and is now also actively promoting a green fixed-price option with NatuurStroom. These fixed-price products enable customers to protect themselves against price fluctuations. Not surprisingly, Fixed-Price NatuurStroom gained ground at the expense of ordinary NatuurStroom, with the number of Fixed-Price NatuurStroom customers rising by 20% compared to 2006. The overall NatuurStroom customer base increased slightly in 2007. In that year efforts were undertaken to expand the NatuurStroom programme with e.g. discounts on energy-saving products for this group of loyal customers. 

As expected, the number of Groenstroom customers decreased further. Since the end of 2005, Nuon Groenstroom has no longer been actively promoted. Instead, we put most of our efforts into offering the NatuurStroom products to a target group of environment-minded customers who are prepared to pay a little extra for the cleanest form of green power. In 2007 it transpired that this approach was failing to cater to a growing group of customers who are interested in green products but are withheld by the extra costs of NatuurStroom. For this reason a new campaign was launched for Nuon GroenStroom in partnership with supermarket chain Albert Heijn in 2007. In 2008 we are continuing to explore whether another green product can be offered alongside Nuon NatuurStroom in order to meet the growing green demand among our customers.   

In the autumn of 2007 Nuon launched a Nature Certificate-based gas product (‘Gas met NatuurCertificaat’) as the successor of the former Nature Certificate product. The new product compensates the CO2 emissions arising from domestic gas consumption. Active efforts to acquire new customers for this product started at the end of 2007.