Public willingness to pay for hydrogen stations expansion policy in Korea: Results of a contingent valuation survey

The Korean government is planning to increase the number of its hydrogen stations from 20 in 2016 to 100 by 2020, to enhance the use of hydrogen fuel cell electric vehicles and to reduce greenhouse gas (GHG) emissions. This article looks at the public willingness to pay (WTP) for implementing the expansion policy. To this end, a contingent valuation survey of 1000 Korean households was implemented. To mitigate the response effect in eliciting the WTP and to increase the statistical efficiency of the analysis of the WTP data, we employed a one-and-one-half-bounded dichotomous choice question format. Furthermore, we used a spike model to model the WTP responses with zero observations. The mean yearly WTP for the policy implementation is computed to be KRW 2258 (USD 2.04) per household, which is statistically significant at the 1% level. The national annual value amounts to KRW 42.8 billion (USD 38.6 million). This value can be taken as an indication of the external benefit of the reduction in GHG emissions by means of the expansion.     

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.     

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.     

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).     

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.     

Choice experiment study on the willingness to pay to improve electricity services

Modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries. Most developing countries’ households rely heavily on wood fuel which impacts on their health and socio-economic status. To ease such a dependency, other modern forms of energy, namely electricity, need to be provided. However, the quality of the electricity service, namely reliability, is an important factor in reducing this dependency. This paper discusses a choice experiment valuation study conducted among electrified rural households located in Kisumu, Kenya, in which the willingness to pay (WTP) to avoid power outages or blackouts was estimated. A mixed logit estimation was applied to identify the various socio-economic and demographic characteristics which determine preferences in reducing power outages among a household’s users. In conclusion, several of the socio-economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households’ preferences towards the improvement of the electricity service.     

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.     

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.     

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 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.     

Consumer demand for ‘green power’ and energy efficiency

This article examines reported willingness to pay for electric utility investments in renewable energy and energy efficiency resources using the results of Deliberative Polls^® conducted by electric utilities in Texas.¹ Age, education, and salary tend to affect reported willingness to pay for utility investments in these resources. Intensive exposure to information about energy resource issues led to an increase in the number of respondents interested in paying a modest premium to support investments in both renewable energy resources and energy efficiency. However, average reported premiums actually declined following the Polls, as very high outlier responses moved to more reasonable values following the Polls. These results support the contention that informed dialogue about energy alternatives will result in broader interest in providing a modest level of support for these resources.     

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.     

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.     

Energy,environmental and economic effects of Renewable Portfolio Standards (RPS) in a Developing Country

This paper analyses the potential of renewable energy for power generation and its energy, environmental and economic implications in Pakistan, using a bottom up type of long term energy system based on the MARKAL framework. The results show that under a highly optimistic renewable portfolio standard (RPS) of 80%, fossil fuel consumption in 2050 would be reduced from 4660 PJ to 306 PJ, and the GHG emissions would decrease from 489 million tons to 27 million tons. Nevertheless, price of the electricity generation will increase significantly from US$ 47/MWh under current circumstances (in the base case) to US$ 86/MWh under RPS80. However the effects on import dependency, energy-mix diversity, per unit price of electricity generation and cost of imported fuels indicate that, it may not be desirable to go beyond RPS50. Under RPS50 in 2050, fuel consumption of the power sector would reduce from 21% under the base case to 9% of total fossil fuels supplied to the country. It will decrease not only GHG emission to 170 million tons but also will reduce import dependency from 73% under the base case to 21% and improve energy diversity mix with small increase in price of electricity generation (from US$ 47/MWh under the base case to US$ 59/MWh under RPS 50).     

Do people put more value on electricity produced using waste-to-hydrogen? Findings from South Korea

South Korea is pushing for the waste-to-hydrogen (W2H) project to reduce greenhouse gases and utilize plastic and vinyl waste (PVW) while reducing environmental pollution from PVW. This research seeks to estimate additional willingness to pay (WTP) for electricity produced using W2H over that produced using traditional power sources, such as coal and nuclear. For the purpose of the estimation, a contingent valuation survey of 1000 people was performed employing the closed-ended one-and-one-half-bound question during November 2020. A spike model is utilized to reflect zero WTP values that a number of interviewees reported in the survey. Several factors affecting the additional WTP were also analyzed to derive implications. The average WTP was computed as KRW 27.7 (USD 0.025) per kWh with statistical significance, which reaches 26.4% of the electricity price. One more point to note is that 54.3% of the respondents stated a zero WTP as they thought that W2H is of no value to them or were worried that the W2H project could increase electricity bills.     

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 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.     

The environmental and cost implications of solar energy preferences in Renewable Portfolio Standards

Many state-level Renewable Portfolio Standards (RPS) include preferences for solar generation, with goals of increasing the generation diversity, reducing solar costs, and encouraging local solar industries. Depending on their policy design, these preferences can impact the RPS program costs and emissions reduction. This study evaluates the impact of these policies on costs and emissions, coupling an economic dispatch model with optimized renewable site selection. Three policy designs of an increased RPS in Michigan are investigated: (1) 20% Solar Carve-Out, (2) 5% Distributed Generation Solar Carve-Out, and (3) 3× Solar Multiplier. The 20% Solar Carve-Out scenario was found to increase RPS costs 28%, while the 5% Distributed Generation Solar Carve-Out increased costs by 34%. Both of these solar preferences had minimal impact on total emissions. The 3× Solar Multiplier decreases total RPS program costs by 39%, but adds less than half of the total renewable generation of the other cases, significantly increasing emissions of CO₂, NO_x, and SO₂ relative to an RPS without the solar credit multiplier. Sensitivity analysis of the installed cost of solar and the natural gas price finds small changes in the results of the Carve-Out cases, with a larger impact on the 3× Solar Multiplier.     

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.     

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.