The following article is from our January 2008 issue.

Target Customer Base: One Million The German eco-utility, Lichtblick, is growing fast - By Bernward Janzing

Since the foundation of Lichtblick nine years ago, 380,000 customers have left Germany's big power companies and switched to the eco-electricity provider. The company now sells 1.4 billion kilowatts per hour of electricity generated from renewable resources annually, at a competitive price.

The electronic counter in the reception area runs faster and faster. It's the customer tally and it's the first thing one sees upon entering the Hamburg-Altona headquarters of Lichtblick (a word play meaning "lighted view" and "glimmer of hope"). It's up to 380,000 customers right now and adds a few hundred more every day. They have all signed on to use the 100 percent purely eco-friendly electricity, completely generated from renewable energy sources.

Many consumers no longer want to pay for nuclear electricity. In the summer of 2006, a catastrophe was narrowly averted at the Forsmark nuclear station in Sweden. One year later, a transformer station caught fire in Germany's Krümmel reactor. Since then, eco-electricity has been booming in Germany.

Significantly, price is no longer an obstacle. The climate-friendly energy mix, which excludes nuclear-generated electricity, can be had at no additional cost. As a result, all four German eco-utilities are growing swiftly. Hamburg-based Lichtblick is the largest, selling 1.4 billion kilowatts per hour annually. This puts the company at 15th place among the 900 electricity providers doing business in Germany.

As opposed to its three competitors in the eco-electricity market, Lichtblick doesn't have roots in the environmental movement. Greenpeace energy eG was founded by the environmental organization of the same name; "Naturstrom" (Natural Electricity) is a product of other environmental associations; and the "Elektrizitätswerke Schönau" (Schönau Electricity Works) grew out of a local anti-nuclear civic initiative.

Lichtblick is 90 percent family-owned. The remaining 10 percent is in the hands of management and the employees, who emphasize, "We have no ties to the established energy industry at all." The company, which now has 220 workers, wants this message to reach a wider public because Germany's four giant utilities have miserable images.

The proprietary family basically consists of one man, Michael Saalfeld. He has been active in the energy industry for decades, especially in the area of cogeneration, or simultaneous production of heat and electricity in one power station. His companies also include Choren Industries, which developed a plant for producing fuels from wood in Freiberg in Saxony. With Lichtblick, Saalfeld entered the business of turning eco-electricity into a mass-market product.

Lichtblick's goal is to set an industry milestone. "Our mid-term target is one million customers," company spokesperson Gero Lücking said. There's no question of supply bottlenecks, he adds. Lichtblick buys its electricity from the Freudenau hydropower station on the Danube in Austria and a biomass cogeneration plant in Saxony-Anhalt.

In addition, the company has around a dozen partners, including suppliers in Switzerland and Scandinavia, says CEO Heiko von Tschischwitz. "We won't encounter any problems with procurement because we will contract new power stations as our customer base grows."

Although electricity from green sources is a bit more expensive than energy from completely amortized coal and nuclear power plants, Lichtblick's retail price is comparable to that of established suppliers. The company saves in other places. "As a young company, we have an efficient structure, develop our IT system in-house and require lower margins," said Lücking. Promotion and marketing costs, he adds, are "significantly lower."

Just like the other eco-electricity providers in Germany, Lichtblick primarily relies on word of mouth to spread the idea of green electricity to potential customers. Advertising would have been inefficient anyway because "electricity is a product that needs a lot of explanation."

Lücking is convinced that established utilities offering conventional electricity on the one hand and - more expensive - eco-electricity on the other are supporting their own agenda. This product/price mix implies that inexpensive electricity can be supplied only through coal and nuclear power. "There is a lot of ideology behind that," he said.

Lichtblick wants to demonstrate that green electricity can be provided at competitive prices. "Of course the established monopolies with their nuclear power stations and wasteful coal units don't like to hear that," said Lücking. "That is why they "keep telling the same old story, in which eco-electricity is expensive."

A glance at current power prices proves that green electricity doesn't have to be expensive. The average customer, who consumes 3,000 kilowatts per hour each year, pays ?732.55 ($1,080) at E.ON Avacon in Saxony-Anhalt, for example. At Lichtblick, the same amount of eco-electricity costs only ?702.90. Some providers charge a bit less such as RWE with ?696.12 for nuclear-coal electricity. But in general, the price of eco-electricity is well within the middle range.

- Bernward Janzing is a freelance journalist in Freiburg.