Willingness to pay for green electricity in Japan as estimated through contingent valuation method

Renewable energy systems, such as photovoltaic and wind-turbine energy systems, are considered to be environmentally sound from the viewpoint of carbon-dioxide emissions and resource depletion. The cost of energy supplied from renewable energy systems is higher than that of conventional fossil-fuel systems, and this hinders the wider spread of renewable-energy systems. Global environmental problems, however, are becoming more obvious. There is a movement to defray the additional cost of electricity generated in environmentally-sound processes. In this paper, we report the results of a survey using the contingent valuation method (CVM) of the willingness of Japanese households to pay more, in the form of a flat monthly surcharge, for renewable energy. The median value of willingness to pay for renewable energy by Japanese households is estimated at about 2000 yen (around 17 US$ with the exchange rate 115 yen/US$) per month per household.     

Wind,hydro or mixed renewable energy source: Preference for electricity products when the share of renewable energy increases

While the share of renewable energy, especially wind power, increases in the energy mix, the risk of temporary energy shortage increases as well. Thus, it is important to understand consumers' preference for the renewable energy towards the continuous growing renewable energy society. We use a discrete choice experiment to infer consumers' preferences when the share of renewable energy increases. The study results indicate that consumers are generally willing to pay extra for an increasing share of renewable energy, but the renewable energy should come from a mixture of renewable energy sources. We also found that consumers prefer to trade with their current supplier rather than another well-known supplier. This study contributes to the energy portfolio theories and the theory of energy diversification in a consumer perspective. The managerial implications of this study are also discussed.     

Renewable electricity as a differentiated good? The case of the Republic of Korea

This paper examines the willingness for Korean consumers to pay a premium for renewable electricity under a differentiated good framework by applying the contingent valuation method. Korean consumers have been required to pay for their use of renewable electricity as of 2012. First, we find that Korean consumers recognise renewable electricity as a differentiated good from traditional electricity generated from fossil fuels or nuclear energy. The mean willingness to pay to use renewable electricity is USD 1.26 per month. Second, we confirm the existence of perfect substitution relationships among variant renewable technologies, which suggests that Korean consumers do not perceive them as differentiated goods. One reason for this perception is that Korean consumers are more inclined to favour economic feasibility over sustainability or the availability of the resource stock when choosing between renewable technology types. In sum, we can say that Korean consumers recognise renewable electricity as a differentiated good but that they do not differentiate between variant renewable technologies. Thus, the imposition of the cost of renewable electricity on consumers in the form of increased electricity charges would be acceptable to consumers as long as any price rise properly reflects their preferences.     

Factors influencing willingness-to-pay for the ENERGY STAR label

In the United States, nearly 17% of greenhouse gas emissions come from residential energy use. Increases in energy efficiency for the residential sector can generate significant energy savings and emissions reductions. Consumer labels, such as the US Environmental Protection Agency's ENERGY STAR, promote conservation by providing consumers with information on energy usage for household appliances. This study examines how the ENERGY STAR label affects consumer preferences for refrigerators. The results of an online survey of a national sample of adults suggest that consumers are, on average, willing to pay an extra $249.82–$349.30 for a refrigerator that has been awarded the ENERGY STAR label. Furthermore, the results provide evidence that respondent willingness-to-pay was motivated by both private (energy cost savings) and public (environmental) benefits.     

Review of Japan's power generation scenarios in light of the Fukushima nuclear accident

Following on from the Fukushima Daiichi nuclear power plant accident, the Japanese government is now in the throes of reviewing its power policy. Under continuing policies of economic revival and greenhouse gas reduction, it is crucial to consider scenarios for the country to realize reliable, low‐carbon, and economic electricity systems in the future. On the other hand, the social acceptance of nuclear power will affect the final political decision significantly. Therefore, in the present study, proposed power generation scenarios in Japan in light of the Fukushima accident were reviewed comprehensively from economic, environmental, technological, resource, security, and social perspectives. The review concludes that in Japan, (i) renewable energy mainly solar and wind needs to be developed as fast as possible subject to various constraints, (ii) more gas power plants will be used to absorb the fluctuations of intermittent renewable energy and supply electricity gap, (iii) nuclear power will be reduced in the future, but a 0% nuclear power scenario by 2030 is unlikely to be a reasonable choice on most measures and (iv) the effective communication with the public is vital important. Copyright © 2014 John Wiley & Sons, Ltd.     

Economic valuation of green hydrogen charging compared to gray hydrogen charging: The case of South Korea

The South Korean government promotes hydrogen-powered vehicles to reduce greenhouse gas (GHG) emissions but these vehicles use gray hydrogen while charging, which causes GHG emissions. Therefore, converting this fuel into green hydrogen is necessary to help reduce GHG emissions, which will incur investment costs of approximately USD 20 billion over a decade. In this study, a contingent valuation method is applied in an analysis to examine the extent to which consumers are willing to pay for green hydrogen charging compared to gray hydrogen charging. The results indicate that the monthly mean of willingness to pay per driver is 51,674 KRW (USD 45.85), equivalent to 4302 KRW per kg (USD 3.82). Additionally, consumers accept a 28.5% increase in the monthly average fuel expenses when converting to green hydrogen. These findings can be used in the development of pricing and energy use plans to finance the expansion of green hydrogen infrastructure.     

A social marketing mix for renewable energy in Europe based on consumer stated preference surveys

Regardless their high potential, renewable energy resources are insufficiently exploited in Europe. This paper examines the potential of social marketing for renewable energy sources. It uses acceptability and willingness to pay results from existing surveys on renewable energy sources and generates a marketing mix for the state, organizations, businesses and consumers. These surveys typically claim to produce results that will be useful for policy making or marketing purposes. However, after they distinguish the parameters that affect acceptability or choice and willingness to pay, they do not go deeper to demonstrate the ways for the exploitation of the results. Therefore, this paper gauges the gap between the results from consumer stated preference studies and the insights generated for social marketing.     

福岛核危机后日本新能源格局的转变及其影响与启示

日本新能源的发展趋势会对全球的能源变革产生巨大作用。从第一次石油危机至今,日本的新能源无论是总量还是在能源结构中所占的份额都有了质的飞跃,这不仅是因为新能源的技术和设备有了长足进步,更重要的是来自日本政府能源政策的支持,但2011年的福岛核危机将彻底改变日本的能源格局。日本政府宣布将中止核电发展计划,可再生能源将成为下一步能源发展战略的核心。然而日本的规模化可再生能源过程也面临着如何弥补核电站退役后的电力缺口、国土面积狭小、电网网架薄弱以及因电价过高导致的巨额补贴费用等诸多困难。与此同时也给日本带来了新的发展机遇,可再生能源将成为日本经济新的增长点。日本核危机使全球核能遭遇低潮期,而可再生能源将迎来新的发展机遇,这有可能催生第三次产业革命。同时也认识到,能源来源的过于单一化使得能源风险加剧,需要建立健全的、快速的能源应急机制,加大国际间能源合作,突破能源技术壁垒。此次日本核危机促使中国反思自身的核电发展策略。中国具有丰富的可再生能源资源,当前应抓住这一发展机遇,加大产品技术含量,切勿盲目扩大生产规模,同时拓展非主流型可再生能源生产设备市场。政府要把握整体布局,避免出现区域性生产"过度"。     

福岛核危机对日本能源战略的影响及启示

至本世纪前10年,核能已成为日本能源供应中不可或缺的重要因素,然而,2011年因"东日本大地震"引发的福岛核危机却动摇了日本继续发展核能的信心,不得不对现有的能源战略进行调整。福岛核危机对日本原来制定的能源战略产生了巨大影响,其中包括能源战略目标难以实现,加剧了对化石燃料的依赖;造成大量的电力缺口,总发电量减少了1/4,导致消费者用电成本急剧增加;短期内不得不增加液化天然气、原油、燃料油和煤炭等化石能源的进口量,加剧了日本能源安全的不确定性。为了缓解福岛核危机所造成的一系列负面影响并保障能源安全,日本政府重新制定了能源战略——重点集中在去核能化,去核能化是顺应民意、安抚民心,并防止核事故再次发生的根本性战略,是日本的必然选择;同时高度重视可再生能源的发展,可再生能源发电比例将由2010年的10%跃升至2030年的35%,总发电量将由2010年的1100×108kW.h提高到2030年的3000×108kW.h;大力实施节约能源战略,提出2030年电力消耗量在2010年的基础上节约1100×108kW.h,能源消耗量在2010年的基础上节约720×108L;另外,日本政府还对电力系统进行改革。结合我国的能源战略及核电发展现状,日本的能源战略调整给予我国的启示包括:要将核安全置于首要地位、加速可再生能源发展和坚持节约能源战略。     

Assessment of Korean customers’ willingness to pay with RPS

To increase the use of renewable energy, the Korean government will introduce the Renewable Portfolio Standard (RPS) in 2012. The RPS places responsibility for extra renewable energy costs on the consumers and allows price competition among different renewable sources. Accordingly, this study analyzes through the contingent valuation (CV) the willingness of Korean households to pay more for electricity generated by wind, photovoltaic (PV), and hydropower. Our empirical results show that, although the willingness to pay (or WTP) was highest for wind power and lowest for hydropower, the differences in WTP among the renewable sources were statistically insignificant. This suggests that Korean consumers prefer a renewable portfolio that minimizes power supply costs.The average WTP for all three energy types was KRW 1562.7 (USD 1.350) per month per household, which was approximately 3.7% of the average monthly electricity bill in 2010. This amount represents only 58.2% of what the Korean government allocated in its budget to the new and renewable energy dissemination program in 2010. Thus, our results imply that the promotion of the new and renewable energy dissemination program may be difficult only with the WTP for electricity generated from renewable sources. Specifically, the mean WTP will not support the set-aside dissemination capacity for PV after 2014.     

Which factors affect the willingness of consumers to adopt renewable energies?

This study presents insights into the determinants of consumers' willingness to adopt renewable energies in the residential sector. The empirical analysis is based on the estimation of binary probit regression models. Empirical results suggest that middle-aged and highly educated people are probably more willing to adopt renewable energy sources in their home. In general, income positively affects consumers' acceptance of renewable energy projects in the residential sector. However, the results suggest that marital status and gender are not statistically significant factors in the willingness to adopt renewable energies. A tax deduction is estimated to be the most effective financial policy measure to promote consumers' acceptance of renewable energies in the residential sector, more so than an energy subsidy. Our analysis is focused on intention because we expect that those people willing to adopt renewable energy sources in their residence are a potentially relevant market segment for the application of renewable energies.     

Energy demand and greenhouse gas emissions from urban passenger transportation versus availability of renewable energy: The example of the Canadian Lower Fraser Valley

The energy consumption and greenhouse gas emissions of all private and transit vehicles from the Lower Fraser Valley, British Columbia, Canada are analysed for the year 2000. The energy figures are then compared with the Province's renewable energy potential. Results indicate that electric trolley buses and the automated rapid transit SkyTrain were eight times as energy efficient as private vehicles. These two modes were also 100 times as emission efficient as private vehicles in terms of greenhouse gas emitted per passenger-kilometer. Analysis of a minimal greenhouse gas emissions scenario, based on local renewable energy resources, electrolytic hydrogen production, and conversion of all private vehicles to fuel-cell technology indicates that such a strategy would utilize between 40% and 60% of the Province's renewable energy resources. We conclude that, if the use of renewable energy resources is chosen to reduce emissions from urban passenger transportation, probability of success will be increased by reducing the sector's energy demand through a transfer of ridership to the most energy efficient modes.     

Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience,environmental concern and energy saving behavior

This study analyzes customers' preferences and their willingness to pay (WTP) for certain service attributes in an electricity supplier choice context. Specifically, a stated preference choice experiment is conducted in the Canary Islands' residential market where limited competition exists. Preferences for different electricity suppliers and three level-of-service attributes are investigated, namely, supply reliability, share of renewable energies and availability of a complementary energy audit service. The results might be interpreted as an indication of different aspects new firms need to consider if they plan to enter in the market. There is an opportunity for new companies to establish in the market, though evidence of brand loyalty to the current company and/or significant switching costs are also found, especially in the case of older people. Regarding the estimated WTP, several results should be highlighted. First, customers who have experienced more serious outages in the past tend to show a higher WTP to reduce the outage frequency. Second, highly-educated respondents, those who state a great concern for the greenhouse gases (GHG) emissions and those who carry out energy saving actions in their homes exhibit a larger WTP for renewable energies. This empirical evidence provides useful information for authorities responsible for energy policy design.     

Evaluating options for the future energy mix of Japan after the Fukushima nuclear crisis

The Fukushima nuclear accident in March 2011 has increased social and political reluctance to embrace nuclear power in Japan (and elsewhere). The Japanese government has thus been considering four possible future energy mixes, including a nuclear-free pathway, and three others with 10%–35% nuclear supply coupled with a larger proportion of renewable energy and fossil fuels to replace nuclear. Here we use multi-criteria decision-making analysis (MCDMA) to assess the potential negative economic (levelised cost of electricity, and energy security), environmental (greenhouse-gas emissions, land transformation, water consumption, heated water discharge, air pollution, radioactive waste, and solid waste) and social (safety issues) impacts of the four proposed pathways to determine which scenario most holistically minimises adverse future outcomes. The nuclear-free pathway has the highest overall potential for adverse outcomes (score=2.49 out of 3), and the 35% nuclear power supply option yielding the lowest negative impact score (0.74) without weightings. Despite some sensitivity to the choice of criterion weights, our analyses demonstrate clearly that from an empirical perspective, a nuclear-free pathway for Japan is the worst option to pursue. We recommend that MCDMA methodology we used for Japan can be applied to other countries to evaluate future electricity generation scenarios.     

Public preferences for alternative electricity mixes in post-Fukushima Japan

Using representative household survey data from Japan after the Fukushima accident, we estimate peoples' willingness-to-pay (WTP) for renewable, nuclear, and fossil fuels in electricity generation. We rely on random parameter econometric techniques to capture various degrees of heterogeneity between the respondents, and use detailed regional information to assess how WTP varies with the distance to both the nearest nuclear power plant and to Fukushima. Compared to fossil fuels, we find a positive WTP for renewable and a negative WTP for nuclear fuels. These effects, in absolute terms, increase with the proximity to Fukushima.     

The carbon content of Japan–US trade

We analyze the greenhouse gas emissions embodied in trade between Japan and the US, extending the Japanese government's linked Japan–US input–output model to include carbon emission coefficients for each sector. We estimate that in 1995, Japan–US trade reduced US industrial emissions by 14.6 million tons of CO₂-equivalent, and increased emissions in Japan by 6.7 million tons, for a global savings of 7.9 million tons. These quantities are less than one percent of each country's total emissions. Trade with the rest of the world reduced emissions by much larger amounts, roughly four percent of each country's emissions. The sectoral patterns of carbon intensity are strongly correlated between Japan and the US; in addition, greater carbon intensity has a small but significantly positive effect on net exports. Policies that tax or otherwise regulate carbon emissions are needed to discourage this destructive route to competitiveness. However, the most important policy implication may be that US industry could cut its carbon emissions by more than half if it matched the environmental performance of industry in Japan.     

Greenhouse gas emissions reduction by use of wind and solar energies for hydrogen and electricity production: Economic factors

This study addresses economic aspects of introducing renewable technologies in place of fossil fuel ones to mitigate greenhouse gas emissions. Unlike for traditional fossil fuel technologies, greenhouse gas emissions from renewable technologies are associated mainly with plant construction and the magnitudes are significantly lower. The prospects are shown to be good for producing the environmentally clean fuel hydrogen via water electrolysis driven by renewable energy sources. Nonetheless, the cost of wind- and solar-based electricity is still higher than that of electricity generated in a natural gas power plant. With present costs of wind and solar electricity, it is shown that, when electricity from renewable sources replaces electricity from natural gas, the cost of greenhouse gas emissions abatement is about four times less than if hydrogen from renewable sources replaces hydrogen produced from natural gas. When renewable-based hydrogen is used in a fuel cell vehicle instead of gasoline in a IC engine vehicle, the cost of greenhouse gas emissions reduction approaches the same value as for renewable-based electricity only if the fuel cell vehicle efficiency exceeds significantly (i.e., by about two times) that of an internal combustion vehicle. It is also shown that when 6000 wind turbines (Kenetech KVS-33) with a capacity of 350 kW and a capacity factor of 24% replace a 500-MW gas-fired power plant with an efficiency of 40%, annual greenhouse gas emissions are reduced by 2.3 megatons. The incremental additional annual cost is about $280 million (US). The results provide a useful approach to an optimal strategy for greenhouse gas emissions mitigation.     

Implications of carbon cap-and-trade for US voluntary renewable energy markets

Many consumers today are purchasing renewable energy in large part for the greenhouse gas (GHG) emissions benefits that they provide. Emerging carbon regulation in the US has the potential to affect existing markets for renewable energy. Carbon cap-and-trade programs are now under development in the Northeast under the Regional Greenhouse Gas Initiative (RGGI) and in early stages of development in the West and Midwest. There is increasing discussion about carbon regulation at the national level as well. While renewable energy will likely benefit from carbon cap-and-trade programs because compliance with the cap will increase the costs of fossil fuel generation, cap-and-trade programs can also impact the ability of renewable energy generation to affect overall CO₂ emissions levels and obtain value for those emissions benefits. This paper summarizes key issues for renewable energy markets that are emerging with carbon regulation, such as the implications for emissions benefits claims and voluntary market demand and the use of renewable energy certificates (RECs) in multiple markets. It also explores policy options under consideration for designing carbon policies to enable carbon markets and renewable energy markets to work together.     

The importance of regret minimization in the choice for renewable energy programmes: Evidence from a discrete choice experiment

This study provides a methodologically rigorous attempt to disentangle the impact of various factors – unobserved heterogeneity, information and environmental attitudes – on the inclination of individuals to exhibit either a utility maximization or a regret minimization behaviour in a discrete choice experiment for renewable energy programmes described by four attributes: greenhouse gas emissions, power outages, employment in the energy sector, and electricity bill. We explore the ability of different models – multinomial logit, random parameters logit, and hybrid latent class – and of different choice paradigms – utility maximization and regret minimization – in explaining people's choices for renewable energy programmes. The “pure” random regret random parameters logit model explains the choices of our respondents better than other models, indicating that regret is an important choice paradigm, and that choices for renewable energy programmes are mostly driven by regret, rather than by rejoice. In particular, we find that our respondents' choices are driven more by changes in greenhouse gas emissions than by reductions in power outages. Finally, we find that changing the level of information to one attribute has no effect on choices, and that being a member of an environmental organization makes a respondent more likely to be associated with the utility maximization choice framework.     

Consumers' preference for renewable energy in the southwest USA

The southwestern part of the US has abundant supply of renewable energy resources but little is known about the consumers' preferences for renewable energy in this region. This paper investigates households' willingness to pay for a renewable energy program in a southwestern state, New Mexico (NM). Using the contingent valuation method, we provide different scenarios that include provision of 10% and 20% of renewable energy supply, to elicit households' willingness to pay (WTP) for the renewable energy. We estimate the WTP for specific shares of renewable energy in the total energy mix as it is a key factor in affecting the price of the energy portfolio in the market. The survey design also allows us to check the scope sensitivity of renewable energy which can help guide the future renewable energy policy. We hope results from this study will offer useful insights to energy regulators and utility companies and help them increase the share of renewable energy supply.