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.     

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.     

Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan

This paper examines consumers' willingness to pay for nuclear and renewable electricity as two alternatives to fossil fuels for the reduction of greenhouse gas emissions. We conduct a choice experiment of consumer-stated preferences on the basis of an online survey in four US states and Japan after the Fukushima nuclear plant accident. First, the results suggest that US consumers' willingness to pay for a 1% decrease in greenhouse gas emissions is $0.31 per month, which is similar to the results for the US a decade ago. Japanese consumers show a slightly lower willingness to pay of $0.26 per month. Second, the average consumer in both countries expresses a negative preference for increases in nuclear power in the fuel mix (to a greater extent in Japan). Third, renewable energy sources were endorsed by both US and Japanese consumers, who show a willingness to pay $0.71 and $0.31 per month for a 1% increase in the use of renewable source energy. This study also examines the differences in respondents' characteristics. Approximately 60% of the US respondents who did not change their perception concerning the use of nuclear energy subsequent to the Fukushima nuclear crisis have almost no preference for variation in nuclear power, which is in stark contrast to the Japanese respondents' opposition to nuclear energy.     

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.     

Assessment of public acceptance and willingness to pay for renewable energy sources in Crete

The aim of this study is to analyse and to evaluate the citizens’ public acceptance and willingness to pay (WTP), for Renewable Energy Sources (RES) in Crete. For this purpose a contingent valuation study was conducted, using a double bound dichotomous choice format to elicit people's WTP and factors affecting it. Residents of 1440 households all over Crete were interviewed face-to-face. Major conclusions can be used as a basis for sustainable energy planning, for policies and the formulation of awareness campaigns and for RES investment programs and projects in order to prepare implementation conditions and enhance public acceptance of renewable energy investments and programmes. Mean WTP per household was found to be 16.33€ to be paid quarterly as an additional charge on the electricity bill. Larger willingness to pay was reported by those with high family income and residence size, those having a higher level of energy information and awareness concerning climatic change, those who have invested in some energy saving measures, and those who suffer from more electricity shortages than others.     

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.     

Optimal design of an integrated renewable-storage energy system in a mixed-use building

The rise of mixed-use buildings contributes to the sustainable development of cities but are still met with challenges in energy management due to the lack of energy efficiency and sustainability guidelines. The use of integrated renewable-storage energy systems is a more beneficial solution to this problem over individual solutions; however, most design studies only focused on single-type buildings. Thus, this study aims to optimally design an integrated energy system for mixed-use buildings using HOMER Grid. The objective is to minimize the net present costs, subject to capacity limits, energy balances, and operational constraints. Economic metrics were used to evaluate and compare the proposed system to the varying design cases such as business-as-usual, stand-alone renewable source, and stand-alone energy storage. The case study considered a mixed-use building in a tropical area, with a solar photovoltaic system as the renewable energy source and lithium-ion battery as the energy storage system technology. The results show that the integrated system is the most financially attractive design case. It has a levelized cost of electricity of 0.1384 US$ kWh⁻¹, which is significantly less than the 0.2580 US$ kWh⁻¹ baseline. The system also provides electricity cost savings of 294 698 US$ y⁻¹, excess electricity of 35 746 kWh, and carbon emission reduction of 550 tons annually for a mixed-use building with daily average consumption of 4557-kWh and 763-kW peak demand.     

A survey of tourist attitudes to renewable energy supply in Australian hotel accommodation

The results of a survey are presented describing the attitudes of Australian tourists to micro-generation renewable energy supply (RES) for hotel accommodation. The average positive response rate to all questions was above 50%, implying a desire by tourists for environmentally friendly accommodation and renewable energy supply. Tourists indicated that they perceived RES to be reliable and expressed a willingness to cooperate with RES initiatives and possible resultant inconveniences. However, there were mixed opinions with regard to consumer willingness to pay for the product. Of the 49% of respondents who were willing to pay extra for RES, 92% replied they would pay between 1% and 5%. Analysis of the variation in response due to accommodation type revealed a ‘city’ hotel versus ‘eco-resort’ difference. Likewise, a breakdown of responses according to country of origin indicated that Australians had a more positive attitude to RES than overseas visitors, including Japanese and Americans. While no variation in response was detected according to gender, age had a measurable bearing on response, with older guests returning a higher positive response rate. Visual queue questions querying aesthetic opinions and ‘not-in-my-backyard’ (NIMBY) attitude to RES revealed that there was virtually no opposition to photovoltaics. Opinions regarding wind energy conversion systems (WECS) varied with type and location, with rooftop WECS receiving more acceptance than stand-alone varieties. A high level of visual acceptance was shown by respondents for onshore wind farms located close to a tourist accommodation centre, with less enthusiasm for offshore farms. A strong NIMBY attitude to WECS was not observed among Australian or local respondents.     

Renewable energy adoption in an ageing population: Heterogeneity in preferences for micro-generation technology adoption

Many countries are endeavouring to supply more of their energy from renewable resources. Such countries are also experiencing an aging population with a greater proportion of people aged ≥65 years. This demographic shift may reduce the uptake of renewable energy, if older person households are less inclined to accept change and adopt new technologies. This paper assesses whether such households have different behavioural responses to energy efficiency compared to the rest of society and investigates whether micro-generation renewable energy technologies are less likely to be adopted by these households. It uses conditional logit and mixed logit models to investigate the impact of age of household on primary heating adoption, and also to assess the impact of older households on the installation of discretionary micro-generation technologies (solar thermal, solar voltaic, and wind power) to supplement existing heating and lighting systems. Results indicate that primary heating choice is not affected but that older person households are less inclined to adopt micro-generation technologies.     

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.     

Stuck between a ROC and a hard place? Barriers to the take up of green energy in the UK

This paper examines the UK mechanisms for ensuring future investment in renewable energy through consumer adoption of green energy tariffs and the Renewable Obligation Certificate (ROC) system. Using a national survey and focus groups the stated willingness by UK customers to pay a premium for renewable or green energy and actual take up of such tariffs is assessed. Substantial differences between willingness to pay for and the adoption of green energy tariffs are reported. This disparity is linked to a range of factors including consumer confusion, lack of supply, complexities of constructing ‘green source’ tariffs under the ROC system and a lack of customer trust. It is concluded that the re-definition of the green energy market in favour of ‘green source’ tariffs, greater direct compliance with the Renewable Obligation by addressing supply constraints, and efforts in providing clearer information and choices for consumers via a compulsory green energy accreditation scheme are required if willing consumers’ are to contribute to investment in renewable energy.     

Performance analysis of various hybrid renewable energy systems using battery,hydrogen, and pumped hydro‐based storage units

The aim of this research is to analyze the techno‐economic performance of hybrid renewable energy system (HRES) using batteries, pumped hydro‐based, and hydrogen‐based storage units at Sharurah, Saudi Arabia. The simulations and optimization process are carried out for nine HRES scenarios to determine the optimum sizes of components for each scenario. The optimal sizing of components for each HRES scenario is determined based on the net present cost (NPC) optimization criterion. All of the nine optimized HRES scenarios are then evaluated based on NPC, levelized cost of energy, payback period, CO₂ emissions, excess electricity, and renewable energy fraction. The simulation results show that the photovoltaic (PV)‐diesel‐battery scenario is economically the most viable system with the NPC of US$2.70 million and levelized cost of energy of US$0.178/kWh. Conversely, PV‐diesel‐fuel cell system is proved to be economically the least feasible system. Moreover, the wind‐diesel‐fuel cell is the most economical scenario in the hydrogen‐based storage category. PV‐wind‐diesel‐pumped hydro scenario has the highest renewable energy fraction of 89.8%. PV‐wind‐diesel‐pumped hydro scenario is the most environment‐friendly system, with an 89% reduction in CO₂ emissions compared with the base‐case diesel only scenario. Overall, the systems with battery and pumped hydro storage options have shown better techno‐economic performance compared with the systems with hydrogen‐based storage.     

Impact of power outages on households in developing countries: Evidence from Ethiopia

In developing countries, access to electricity has received much attention. However, the reliability of its supply has been given less focus, though power outages happen frequently and are expected to limit gains from electricity connection. In this paper, I go beyond electricity connection and provide an average estimate of monthly defensive expenditures at different monthly hours of power outages for urban households in Ethiopia, using the generalized propensity score method. I also elicit households' willingness to pay for improved electricity supply, using a stated preference method, to account for non-monetary costs of outages. Based on the average estimated results, a back-of-the-envelope calculation for urban households of Ethiopia with electricity connection provides a monthly defensive expenditure of US$14.8 million and a monthly willingness to pay of US$6.2 million for improved electricity supply, on top of the regular electricity bill. The study underscores that connection to electricity is not enough; the reliability of its supply is also important.     

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.     

Occupants’ acceptability of zero energy housing in Finland

Based on an extensive Finnish data covering 1350 interviews the authors surveyed the end users’ perceptions concerning improved energy efficiency, renewable energy integration and zero energy housing. The data has wide social coverage and it matches well with both age and gender distribution in Finland. The survey indicates that solar photovoltaic panels and heat pumps are among most familiar renewable energy technologies to the interviewed occupants while the panels also enjoy the most positive image among the interviewees. However, the interviewees’ willingness to pay extra for energy efficient improvements was more munificent than that for the renewable energy installations. Zero energy buildings were only known to roughly half of the interviewees while 48.9% of the respondents did not even know whether there is an energy performance certificate for their house or not.     

Willingness to pay for renewable energy investment in Korea: A choice experiment study

Renewable energy sources are considered as alternatives for coping with the high price of oil and global warming. The Korean government has set a target that 11% of the total primary energy supply should be obtained through renewable energy sources until 2030. In order to develop proper policies for renewable energy investment, it is necessary to analyze the benefits of renewable energy investment based on households’ willingness to pay. This study attempts to apply a choice experiment (CE) for assessing renewable energy investment in Korea. Moreover, we employ a multinomial probit (MNP) model to relax the assumption that all respondents have the same preferences for the attributes being valued, which is usually required in empirical CE studies. An MNP model allows the most flexible pattern of error correlation structure. The results reveal that the Korean public puts a value on the protection of wildlife, reduction of pollution, and increased employment opportunities. On the other hand, respondents do not derive significant values from the improvement of landscapes. This study is expected to provide policy-makers with useful information for evaluating and planning policies related to renewable energy investment.     

Assessment of government support for the household adoption of micro-generation systems in Korea

This paper investigates how Korean government support affects household adoption of renewable energy-based micro-generation systems by analyzing household preferences in relation to the costs and benefits of system installation and different kinds of government support. The research adopts a discrete choice experiment approach and focuses on two micro-generation technologies: solar voltaic and solar thermal. Our empirical analysis revealed firstly that households prefer micro-generation systems that have low installation costs but high energy saving benefits and long warranty periods; and secondly that households prefer direct subsidies to low-interest loans. However, we also found that households are reluctant to install photovoltaic or solar thermal systems in reality because they see the cost of system installation as being higher than the benefits they would receive from such installation. In short, while existing government supports are somewhat effective in promoting household adoption of micro-generation systems, there also exists the obstacle that the majority of households are unwilling to install such systems despite government support. Thus several policy improvements, which focus on increasing the benefits and decreasing the installation costs of micro-generation systems, are suggested in this paper.     

What do customers want from improved residential electricity services? Evidence from a choice experiment

Improvements in customer satisfaction as well as product/service quality represent a common objective of all businesses, and electricity services are no exception. Using choice experiments and a mixed logit model, this study quantitatively analyzes customers' preferences and their marginal willingness to pay for improved residential electricity services. The study provides an ex ante evaluation of customers' acceptance of hypothetical electricity services. According to the results, customers consider the electricity bill and the electricity mix as the two most important attributes when choosing their electricity services. Customers are willing to pay 2.2% more in the average electricity bill (an additional monthly electricity bill of KRW 1,064; USD 0.96) for a significant increase in the share of renewable energy, which is far less than the actual cost of achieving this renewable target. Therefore, it is better to maintain the current electricity mix in principle, and the renewable share should be gradually expanded instead of making a sudden change in the electricity mix. In addition, customers are willing to pay KRW 6,793 (USD 6.15) more to reduce blackouts once in a year and KRW 64/year (USD 0.06/year) to reduce a minute of each blackout.     

Implementation of renewable energy in Scottish rural area: A social study

Nowadays, renewable energy is considered one of the valuable sources of energy in the energy sector. It is contributing major role in fulfilling the increasing level of global energy crisis. Although most of study of renewable energy is done through its technological development and a few are done in its acceptance level socially. In such consequences, this research considers the social acceptability of renewable energy in terms of economical, environmental and cultural perspectives. As a test bed, Scottish rural areas were considered for this social study, where the areas are regarded as lacking of continuous energy supply due to weak grid and socio-economic growth. This research investigates the intimate and sensitive nature of the social issues in rural Scotland that are important in the communities when decisions are made on renewable energy supply and demand. The social interactions are investigated by means of both interviewing the local residents and distributed questionnaires among them. The responses from the interviews and the questions are analyzed according to the predefined criterion of renewable energy such as willingness to accept, changes of life style, income and pay, and education and employment.