Willingness to pay for green electricity in Korea: A contingent valuation study

Green electricity is energy that is generated from renewable energy sources such as solar power, wind power, small-scale hydroelectric power, tidal power, and biomass power. These sources mostly do not produce pollutants and are considered environmentally friendly. However, considering the current state of technology, they are more costly. Government should take visible actions to compensate for the increased production costs. This paper attempts to apply a contingent valuation (CV) method to obtain at least a preliminary evaluation of the benefits that ensue from the introduction of the policy that raises the percentage of green electricity consumption from 0.2% of the total electricity supply to 7% by 2011. Overall, the CV survey was successful in eliciting the willingness to pay (WTP) for green electricity considering that the CV method operated within respondents’ abilities to answer and the WTP estimates were statistically significant. The monthly mean WTP estimates from parametric and non-parametric methods were KRW 1681 (USD 1.8) and KRW 2072 (USD 2.2), respectively. The estimates of the annual benefits to relevant residents amounted to KRW 150.5 billion (USD 157.5 million) and KRW 185.6 billion (USD 194.2 million), respectively.     

The public's value of hydrogen fuel cell buses: A contingent valuation study

With the increasing interest in global warming, there has been intense international competition with regard to the introduction of the hydrogen (H₂) fuel cell (FC) bus, which represents a promising solution for the low-carbon age. With respect to the investment in H₂-based technology development and the expansion of H₂ FC vehicles, the consumer attitude is a crucial factor because the Korean government will consider it one of the most important factors in its decision to approve a large-scale introduction of H₂ FC buses. In this regard, this study measures the public's willingness to pay (WTP) for a large-scale introduction of H₂ FC buses in Korea by employing a survey approach termed the contingent valuation. Furthermore, to enhance statistical efficiency, this study employs the one-and-one-half-bound dichotomous choice method. The annual mean WTP estimate was KRW 4230 (USD 4.55) per household as of 2007. The estimate of the annual benefits to the affected residents was KRW 32.3 billion (USD 34.7 million). The results of this study are expected to be helpful in policy decisions related to the introduction of H₂ FC buses and investment in H₂ technology development.     

Households’ willingness to pay for developing marine bio-hydrogen technology: The case of South Korea

The utilization of renewable energy sources for hydrogen production is attracting attention regarding a sustainable future energy system. The South Korean Government aims to develop and commercialize marine biological hydrogen (MBH) technology, which produces hydrogen using marine hyperthermophilic archaeons. The purpose of this study is to perform an economic evaluation of MBH technology based on households’ mean willingness to pay (WTP). The contingent valuation method and cost–benefit analysis are used as methodologies for detailed analysis. The results show that the mean WTP estimate is KRW 2508 (USD 2.14) per household per year, but the ratio of households with zero WTP is considerable. The net present value and the benefit–cost ratio of MBH technology development are KRW 169.04 billion (USD 144.35 million) and 5.65, respectively, proving the high economic feasibility of the technology. Several implications for future decisions on MBH technology are provided based on the results.     

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.     

What determines urban households’ willingness to pay for CO2 emission reductions in Turkey: A contingent valuation survey

This paper explores Turkish urban households’ willingness to pay (WTP) for CO₂ emission reductions expected to result from improvements in power production. A face-to-face questionnaire, with a Contingent valuation (CV) module prepared using the double-bounded dichotomous choice elicitation framework, was administered to 2422 respondents representative of urban Turkey—a developing country with low but rapidly increasing greenhouse gas emissions. The determinants of WTP were identified by considering not only the impact of standard socio-economic factors but also the effects of environmental knowledge, attitudes and behaviour, the relevance of the identity of the collection agent (national versus international institutions) in terms of trust people have towards them, and the degree of perceived participation of others in the realization of the project. Our study confirms the existing literature in demonstrating that WTP figures reported by young and educated people that are active on environmental issues, and who also possess material security and environmental knowledge, are more likely to be high. However, their willingness to make contributions is hampered significantly by their belief that their fellow citizens will not contribute and the general lack of trust in institutions. Overall, this study may be taken as a call to eliminate governance-related uncertainties in climate change deals.     

Public perspective on co-firing hydrogen with natural gas in power plants in South Korea

The South Korean government plans to gradually change existing power generation from natural gas (NG) to hydrogen co-fired with NG to help abate emissions of greenhouse gases (GHGs). This research aims to explore people's additional willingness to pay (AWTP) for consuming one kWh of electricity generated from a mixture of 35% hydrogen and 65% NG compared to electricity generated from 100% NG. Contingent valuation (CV) was applied to obtain data on the AWTP. A CV survey of 1000 randomly chosen people was conducted to obtain data, a one-and-one-half-bounded model was adopted to elicit the AWTP from interviewees, and a spike model was used to analyze the AWTP observations with zeros. The average AWTP was obtained as KRW 24.3 (USD 0.022) per kWh. Since the electricity price was KRW 107.9 (USD 0.096) per kWh, the value that people place on co-firing, which means the sum of the price and the AWTP, was KRW 132.2 (USD 0.118) per kWh. Because the total cost of the power supply for hydrogen co-fired with NG is KRW 145.7 (USD 0.130) per kWh, a subsidy of at least KRW 13.5 (USD 0.012) per kWh must be provided to encourage co-firing to mitigate GHG emissions.     

Estimating the public’s value of implementing the CO2 emissions trading scheme in Korea

The Korean government set out the carbon dioxide (CO₂) emissions reduction target as 30% below business-as-usual by 2020. The CO₂ emissions trading scheme (ETS) was initiated in January 2015 to meet this target. We attempt to estimate the public's value of implementing the ETS for CO₂ emissions reduction. We apply the contingent valuation (CV) method using the willingness to pay (WTP) data obtained from a national CV survey of 1000 randomly selected households. The survey was conducted via in-person interviews. Value judgments required of the respondents were within their abilities. The mean WTP to achieve the stated target of CO₂ emissions reduction using ETS is estimated to be KRW 1873 (USD 1.66) per household per month, which is statistically significant at the 1% level. The aggregate national value amounts to KRW 409.2 billion (USD 363.4 million) per year. Thus, even though Korea has no obligations to cut emissions under the Kyoto protocol, the public is willing to bear a financial burden to implement the ETS. If its cost is less than this value, implementing the ETS can be socially profitable. The results of this study can serve as a basis for further policy discussions and decisions.     

Households' willingness to pay for overhead-to-underground conversion of electricity distribution networks

Underground low-voltage electricity networks have several advantages over overhead networks including reliability of supply, safety and improved visual amenity. The economic viability of replacing existing overhead networks with new underground networks depends on the value of these benefits to households, but no complete value estimates are available in the literature. This paper represents a contribution towards addressing this research gap. A stated choice survey is used to estimate willingness to pay for undergrounding in established residential areas in Canberra, Australia. Average willingness to pay is at least A$6838 per household and there is significant variation in preferences over the population. The results suggest that benefits would be highest in areas with higher household income and older residents where visual amenity, safety, tree trimming, or restrictions on the use of yard space are of concern.     

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.     

Willingness to pay for hydrogen fuel cell electric vehicles in China: A choice experiment analysis

The hydrogen energy is considered to be main power source of transport sector in the future, and a huge amount of funds have been invested into developing hydrogen fuel cell electric vehicles (FCEVs). Since FCEVs are in initial development stage and there're few FCEVs on the road, before their expansion this paper intends to conduct an economic analysis for FCEVs by using the choice experiment method. In the choice experiment, 1072 participants were required to select among two FCEVs and one conventional fuel vehicle. Logit models were estimated and then the results were used to calculate the willingness to pay for FCEVs. Results showed that purchase price, driving range, refueling time, fuel cost, emissions reduction, refueling accessibility are significant influences, and the marginal values for every 200 km improvement in driving range, 5 min reduction in refueling time, RMB 0.5/kilometer reduction in fuel cost, 20% reduction in emissions, and 20% improvement of refueling accessibility were estimated to be RMB 49,091, 12,727, 3818, 47,818, and 12,909, respectively. A range of FCEV configurations were calculated, and compared to a gasoline-powered counterpart the extra value that customers were likely to pay for a FCEV ranged from RMB 20,810 to 95,310. These results have significant implications for promoting FCEVs and contribute to better sustainability in transport sector.     

Psychological determinants of attitude towards and willingness to pay for green electricity

The results of a mail survey of 855 Swedish household consumers showed that willingness to pay for green electricity increased with a positive attitude towards green electricity and decreased with electricity costs. Attitude towards green electricity was in turn related to awareness of consequences of environmental problems for oneself, others, and the biosphere, concerns for these consequences, and self-transcedent value types.     

Residential consumers in the Cape Peninsula’s willingness to pay for premium priced green electricity

A number of studies have explored the willingness (i.e. stated willingness as opposed to actual willingness) of consumers to pay a premium for green electricity in developed countries. However, little is known about how this translates into an emerging economy context. This study investigates the level of willingness of residential households in South Africa’s Cape Peninsula to pay a premium for electricity from renewable energy. It methodologically drew on recent contributions in the literature on norm-motivated behaviour used to identify testable factors that could influence residential consumers’ willingness to pay (WTP).     

Valuing a wind farm construction: A contingent valuation study in Greece

Our analysis is based on data from a double-bounded dichotomous choice contingent valuation study implemented to elicit public attitudes towards renewable energy generation and their willingness to pay for the construction of a wind farm in the area of Messanagros in the island of Rhodes, Greece. Results indicate that there are significant positive values deriving from the proposed project. Respondents report a mean willingness to pay a premium in their bi-monthly electric bills of €8.86 for the sole purpose of the construction of the wind farm. The estimated economic benefits to the local population are weighed against the investment cost in a cost–benefit analysis to inform policy making and implications for EU energy policy are provided.     

Haze,health, and income: An integrated model for willingness to pay for haze mitigation in Shanghai,China

Most existing studies indicate that residentsö willingness to pay (WTP) for environmental protection mainly depends on income and the degree of environmental pollution. However, owing to lack of suitable data, less research has focused on why people have higher or lower WTP for environmental protection, and many questions about their reasons remain unanswered. Based on contingent valuation questionnaires in 16 districts of Shanghai, this study investigates the influencing factors of residentsö WTP for haze mitigation. To avoid a multicollinearity problem, we integrate principal component analysis and the probit model to examine the determinants of WTP. Results show that residentsö WTP for haze mitigation ranges from 343.31 to 359.48 USD. The major influencing factors of residentsö WTP include subjective knowledge of haze impacts, understanding of the frequency and severity of haze, and social trust in haze data published by the government. In particular, we find that owing to anti-haze household expenditure on mitigating the effects of haze pollution on health, residents who considered that the areas they lived in were more influenced by haze pollution do not always have higher WTP for haze mitigation. Results of this study have policy implications for haze mitigation regarding the effect of anti-haze household expenditure.     

Households’ willingness to pay for safeguarding security of natural gas supply in electricity generation

Security of energy supply is a major issue for all EU Member States due to Europe's increasing dependence on imported fossil-fuel sources and the continuous rise in energy demand. The latter is of particular importance in electricity sector given the continuously increasing use of gas for electricity generation. In order to properly tackle with the problem, concerted actions are required by the EU Member States in several levels, i.e. legislative, political, etc. Nevertheless, these actions will come at an additional cost paid by the society either through increased electricity bills or through public financing for energy security investments. Thus, such policies should be justified on the basis of cost-benefit analysis. Towards this direction, it may be necessary to take into account non-market costs and benefits, i.e. the value that consumers place on interruptions avoided. In order to explore households’ perceptions and willingness to pay for securing gas supply for electricity production, an empirical study was conducted by means of the contingent valuation method. The results indicate that consumers are willing to pay a premium on their electricity bills in order to internalize the external costs of electricity production, in terms of energy security, which are caused from imported fuels.     

Willingness to pay for heavy-duty hydrogen fuel cell trucks and factors affecting the purchase choices in China

Hydrogen and fuel cells are getting increasing attention, and they are more widely used in the transportation sector. Meanwhile, hydrogen fuel cell heavy-duty trucks are also attracting people's attention. In this paper, people's tendency to adopt and the influencing factors of willingness-to-pay for hydrogen fuel cell heavy trucks are studied based on a choice experiment, and customers' willingness to pay is also analyzed. The results show that customers are not very willing to buy hydrogen fuel cell heavy-duty trucks, but the purchase price, fuel cost, environmental awareness, and the number of heavy-duty trucks purchased have a significant impact on the choice of participants. People's willingness to pay is 116,099–131,579 USD, more than 50% higher than diesel heavy trucks, and they are willing to pay no more than 1548 USD a year for maintenance. Based on this, the research will provide references for the formulation of manufacturers' production strategies, government subsidies policies and distributors' marketing plans.     

The influence of home-site factors on residents’ willingness to pay: An application for power generation from scrubland in Galicia,Spain

The main objective of this paper is to measure how much home-site factors can help to explain the individual WTP for an environmental improvement in power generation in Galicia, Spain. The results show that home-site variables such as a dispersed population, local community income, population growth and coastal/inland emplacements have significant effects on the residents’ WTP. Individual and home-site models are compared using goodness-of-fit measures, and implications for forestry resources management and energy planning are discussed. The results favor to take into account the home-site variables into the WTP function. Moreover, a different structure of preferences for coastal and inland inhabitants is identified. A cross-validity analysis shows that some home-site coefficients are common to both sub-samples, but the scale parameters are not homogenous. This analysis could be useful to inform and support the public energy policy when designing incentives that promote the electric use of biomass.     

Public acceptance for the implementation of hydrogen self-refueling stations

The utilization of hydrogen energy is important for achieving a low-carbon society. Japan has set ambitious goals for hydrogen stations and fuel cell vehicles, focusing on the introduction and dissemination of self-refueling systems. This paper evaluates public trust in the fuel, equipment, and self-handling technology related to self-refueling hydrogen stations and compares it with that for widespread gasoline stations. To this end, the results of an online survey of 300 people with Japanese driver licenses are reported and analyzed. The results show that trust in the equipment and self-handling is more important for the user than trust in the fuel. In addition, to introduce and disseminate new technology such as hydrogen stations, users must be made aware of the risk of using the technology until it becomes as familiar as existing gasoline station technology.     

Willingness to pay for reduced visual disamenities from offshore wind farms in Denmark

Expansion of offshore wind power plays a significant role in the energy policies of many EU countries. However, offshore wind farms create visual disamenities. These disamenities can be reduced by siting wind farms at larger distances from the coast—and accepting higher costs per kWh produced. In this paper willingness to pay for reducing the visual disamenities from future offshore wind farms is elicited using the economic valuation method Choice Experiments. The valuation scenario comprises the location of 720 offshore wind turbines (equivalent to 3600 MW) in farms at distances equal to: 12, 18 or 50 km from the shore, relative to an 8 km baseline. Using a fixed effect logit model average willingness to pay amounts were estimated as: 46, 96 and 122 Euros/household/year for having the wind farms located at 12, 18 and 50 km from the coast as opposed to 8 km. The results also reveal that WTP deviates significantly depending on the age of respondents and their experiences with offshore wind farms.     

Tourist preferences for fuel cell vehicle rental: going green with hydrogen on the island of Tenerife

Using a discrete choice experiment (DCE), a survey of international tourists on the island of Tenerife is conducted to examine preferences for fuel cell vehicle (FCV) rental while on vacation. Survey respondents were generally supportive of FCVs and willing to hire one as part of their trip but for most individuals this is contingent on an adequate fuel station infrastructure. A latent class model was used to identify three distinct groups; one of which potentially represent early adopters – they have a high willingness-to-pay (WTP) for green hydrogen and are more likely to accept a low number of fuel stations but it could be challenging to convince them to use FCVs if they are not run on green hydrogen.