IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v214y2021ics0360544220321885.html
   My bibliography  Save this article

Towards carbon free economy and electricity: The puzzle of energy costs, sustainability and security based on willingness to pay

Author

Listed:
  • Balezentis, Tomas
  • Streimikiene, Dalia
  • Mikalauskas, Ignas
  • Shen, Zhiyang

Abstract

The objective of this paper is to analyse the main drivers of households’ acceptance of renewable energy sources and to assess their willingness to pay for extension of renewable energy sources in the electricity balance of a European Union Member State – Lithuania. The data were collected through a questionnaire survey. The contingent valuation method was applied. The study revealed that most of the respondents have some knowledge about specific renewable energy systems and their benefits. The rate of usage of micro-generation renewable energy technologies was found to be quite low (only 12% of households reported owning micro-generation renewable technologies). Mitigation of environmental impact is seen as an important motive for accepting renewable energy technologies. Willingness to pay for an increase in the share of renewables in electricity mix was estimated to sit in between 0.0153 and 0.0296 Eur/kWh or 12–23% extra (depending on the share of renewables in electricity mix).

Suggested Citation

  • Balezentis, Tomas & Streimikiene, Dalia & Mikalauskas, Ignas & Shen, Zhiyang, 2021. "Towards carbon free economy and electricity: The puzzle of energy costs, sustainability and security based on willingness to pay," Energy, Elsevier, vol. 214(C).
    • Handle: RePEc:eee:energy:v:214:y:2021:i:c:s0360544220321885
    DOI: 10.1016/j.energy.2020.119081
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544220321885
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2020.119081?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
    2. Kontogianni, Areti & Tourkolias, Christos & Skourtos, Michalis, 2013. "Renewables portfolio, individual preferences and social values towards RES technologies," Energy Policy, Elsevier, vol. 55(C), pages 467-476.
    3. Stamatios Ntanos & Grigorios Kyriakopoulos & Miltiadis Chalikias & Garyfallos Arabatzis & Michalis Skordoulis, 2018. "Public Perceptions and Willingness to Pay for Renewable Energy: A Case Study from Greece," Sustainability, MDPI, vol. 10(3), pages 1-16, March.
    4. Enevoldsen, Peter & Sovacool, Benjamin K., 2016. "Examining the social acceptance of wind energy: Practical guidelines for onshore wind project development in France," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 178-184.
    5. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    6. Koundouri, Phoebe & Kountouris, Yiannis & Remoundou, Kyriaki, 2009. "Valuing a wind farm construction: A contingent valuation study in Greece," Energy Policy, Elsevier, vol. 37(5), pages 1939-1944, May.
    7. Savvanidou, Electra & Zervas, Efthimios & Tsagarakis, Konstantinos P., 2010. "Public acceptance of biofuels," Energy Policy, Elsevier, vol. 38(7), pages 3482-3488, July.
    8. Bertsch, Valentin & Hall, Margeret & Weinhardt, Christof & Fichtner, Wolf, 2016. "Public acceptance and preferences related to renewable energy and grid expansion policy: Empirical insights for Germany," Energy, Elsevier, vol. 114(C), pages 465-477.
    9. Hanif Malekpoor & Konstantinos Chalvatzis & Nishikant Mishra & Mukesh Kumar Mehlawat & Dimitrios Zafirakis & Malin Song, 2018. "Integrated grey relational analysis and multi objective grey linear programming for sustainable electricity generation planning," Annals of Operations Research, Springer, vol. 269(1), pages 475-503, October.
    10. Mozumder, Pallab & Vásquez, William F. & Marathe, Achla, 2011. "Consumers' preference for renewable energy in the southwest USA," Energy Economics, Elsevier, vol. 33(6), pages 1119-1126.
    11. Kim, Kyung Jae & Lee, Hwarang & Koo, Yoonmo, 2020. "Research on local acceptance cost of renewable energy in South Korea: A case study of photovoltaic and wind power projects," Energy Policy, Elsevier, vol. 144(C).
    12. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    13. Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
    14. Zhang, Lei & Wu, Yang, 2012. "Market segmentation and willingness to pay for green electricity among urban residents in China: The case of Jiangsu Province," Energy Policy, Elsevier, vol. 51(C), pages 514-523.
    15. Lee, Chul-Yong & Lee, Min-Kyu & Yoo, Seung-Hoon, 2017. "Willingness to pay for replacing traditional energies with renewable energy in South Korea," Energy, Elsevier, vol. 128(C), pages 284-290.
    16. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    17. Liu, Wenling & Wang, Can & Mol, Arthur P.J., 2013. "Rural public acceptance of renewable energy deployment: The case of Shandong in China," Applied Energy, Elsevier, vol. 102(C), pages 1187-1196.
    18. Murakami, Kayo & Ida, Takanori & Tanaka, Makoto & Friedman, Lee, 2015. "Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan," Energy Economics, Elsevier, vol. 50(C), pages 178-189.
    19. Sundt, Swantje & Rehdanz, Katrin, 2015. "Consumers' willingness to pay for green electricity: A meta-analysis of the literature," Energy Economics, Elsevier, vol. 51(C), pages 1-8.
    20. Kim, Ju-Hee & Kim, Hyo-Jin & Yoo, Seung-Hoon, 2019. "Willingness to pay for fuel-cell electric vehicles in South Korea," Energy, Elsevier, vol. 174(C), pages 497-502.
    21. Harajli, Hassan & Gordon, Fabiana, 2015. "Willingness to pay for green power in an unreliable electricity sector: Part 2. The case of the Lebanese commercial sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1643-1649.
    22. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
    23. Dagher, Leila & Harajli, Hassan, 2015. "Willingness to pay for green power in an unreliable electricity sector: Part 1. The case of the Lebanese residential sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1634-1642.
    24. William S. Breffle & Edward R. Morey & Tymon S. Lodder, 1998. "Using Contingent Valuation to Estimate a Neighbourhood's Willingness to Pay to Preserve Undeveloped Urban Land," Urban Studies, Urban Studies Journal Limited, vol. 35(4), pages 715-727, April.
    25. Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
    26. Tabi, Andrea & Wüstenhagen, Rolf, 2017. "Keep it local and fish-friendly: Social acceptance of hydropower projects in Switzerland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 763-773.
    27. Giansoldati, Marco & Danielis, Romeo & Rotaris, Lucia & Scorrano, Mariangela, 2018. "The role of driving range in consumers' purchasing decision for electric cars in Italy," Energy, Elsevier, vol. 165(PA), pages 267-274.
    28. Guo, Xiurui & Liu, Haifeng & Mao, Xianqiang & Jin, Jianjun & Chen, Dongsheng & Cheng, Shuiyuan, 2014. "Willingness to pay for renewable electricity: A contingent valuation study in Beijing, China," Energy Policy, Elsevier, vol. 68(C), pages 340-347.
    29. Alam, Majbaul & Bhattacharyya, Subhes, 2017. "Are the off-grid customers ready to pay for electricity from the decentralized renewable hybrid mini-grids? A study of willingness to pay in rural Bangladesh," Energy, Elsevier, vol. 139(C), pages 433-446.
    30. Chan, Kai-Ying & Oerlemans, Leon A.G. & Volschenk, Jako, 2015. "On the construct validity of measures of willingness to pay for green electricity: Evidence from a South African case," Applied Energy, Elsevier, vol. 160(C), pages 321-328.
    31. Liu, Nan & Zhao, Yuan & Ge, Jiaqi, 2018. "Do renters skimp on energy efficiency during economic recessions? Evidence from Northeast Scotland," Energy, Elsevier, vol. 165(PA), pages 164-175.
    32. Zografakis, Nikolaos & Sifaki, Elli & Pagalou, Maria & Nikitaki, Georgia & Psarakis, Vasilios & Tsagarakis, Konstantinos P., 2010. "Assessment of public acceptance and willingness to pay for renewable energy sources in Crete," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(3), pages 1088-1095, April.
    33. Anna Kowalska-Pyzalska, 2019. "Do Consumers Want to Pay for Green Electricity? A Case Study from Poland," Sustainability, MDPI, vol. 11(5), pages 1-20, March.
    34. Vassilis Markantonis & Kostas Bithas, 2010. "The application of the contingent valuation method in estimating the climate change mitigation and adaptation policies in Greece. An expert-based approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 12(5), pages 807-824, October.
    35. Ma, Chunbo & Rogers, Abbie A. & Kragt, Marit E. & Zhang, Fan & Polyakov, Maksym & Gibson, Fiona & Chalak, Morteza & Pandit, Ram & Tapsuwan, Sorada, 2015. "Consumers’ willingness to pay for renewable energy: A meta-regression analysis," Resource and Energy Economics, Elsevier, vol. 42(C), pages 93-109.
    36. Nomura, Noboru & Akai, Makoto, 2004. "Willingness to pay for green electricity in Japan as estimated through contingent valuation method," Applied Energy, Elsevier, vol. 78(4), pages 453-463, August.
    37. Ek, Kristina, 2005. "Public and private attitudes towards "green" electricity: the case of Swedish wind power," Energy Policy, Elsevier, vol. 33(13), pages 1677-1689, September.
    38. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    39. Herbes, Carsten & Rilling, Benedikt & MacDonald, Scott & Boutin, Nathalie & Bigerna, Simona, 2020. "Are voluntary markets effective in replacing state-led support for the expansion of renewables? – A comparative analysis of voluntary green electricity markets in the UK, Germany, France and Italy," Energy Policy, Elsevier, vol. 141(C).
    40. Hansla, Andre & Gamble, Amelie & Juliusson, Asgeir & Garling, Tommy, 2008. "Psychological determinants of attitude towards and willingness to pay for green electricity," Energy Policy, Elsevier, vol. 36(2), pages 768-774, February.
    41. Carsten Herbes & Benedikt Rilling & Scott Macdonald & Nathalie Boutin & Simona Bigerna, 2020. "Are voluntary markets effective in replacing state-led support for the expansion of renewables? – A comparative analysis of voluntary green electricity markets in the UK, Germany, France and Italy," Post-Print hal-03511354, HAL.
    42. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin, Jin & Dong, Jun & Liu, Dongran & Zhang, Yaoyu & Ma, Tongtao, 2022. "From peak shedding to low-carbon transitions: Customer psychological factors in demand response," Energy, Elsevier, vol. 238(PA).
    2. Z. Yu & S.A.R. Khan & P. Ponce & Ana Beatriz Lopes de Sousa Jabbour & C.J. Chiappetta Jabbour, 2022. "Factors Affecting Carbon Emissions in Emerging Economies in the Context of a Green Recovery: Implications for Sustainable Development Goals," Post-Print hal-04276072, HAL.
    3. Liobikienė, Genovaitė & Dagiliūtė, Renata, 2021. "Do positive aspects of renewable energy contribute to the willingness to pay more for green energy?," Energy, Elsevier, vol. 231(C).
    4. Yu, Zhang & Khan, Syed Abdul Rehman & Ponce, Pablo & Lopes de Sousa Jabbour, Ana Beatriz & Chiappetta Jabbour, Charbel Jose, 2022. "Factors affecting carbon emissions in emerging economies in the context of a green recovery: Implications for sustainable development goals," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    5. Lin, Boqiang & Qiao, Qiao, 2023. "Exploring the participation willingness and potential carbon emission reduction of Chinese residential green electricity market," Energy Policy, Elsevier, vol. 174(C).
    6. Sadik-Zada, Elkhan Richard & Gatto, Andrea, 2023. "Civic engagement and energy transition in the Nordic-Baltic Sea Region: Parametric and nonparametric inquiries," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    7. Gideon Otchere-Appiah & Shingo Takahashi & Mavis Serwaa Yeboah & Yuichiro Yoshida, 2021. "The Impact of Smart Prepaid Metering on Non-Technical Losses in Ghana," Energies, MDPI, vol. 14(7), pages 1-16, March.
    8. Ladenburg, Jacob & Skotte, Maria, 2022. "Heterogeneity in willingness to pay for the location of offshore wind power development: An application of the willingness to pay space model," Energy, Elsevier, vol. 241(C).
    9. Pavel Tcvetkov, 2021. "Climate Policy Imbalance in the Energy Sector: Time to Focus on the Value of CO 2 Utilization," Energies, MDPI, vol. 14(2), pages 1-22, January.
    10. Shi, Lei & Wu, Rongxin & Lin, Boqiang, 2023. "Where will go for electric vehicles in China after the government subsidy incentives are abolished? A controversial consumer perspective," Energy, Elsevier, vol. 262(PA).
    11. Hasan Dinçer & Serhat Yüksel & Tamer Aksoy & Ümit Hacıoğlu, 2022. "Application of M-SWARA and TOPSIS Methods in the Evaluation of Investment Alternatives of Microgeneration Energy Technologies," Sustainability, MDPI, vol. 14(10), pages 1-16, May.
    12. Sara Ghaboulian Zare & Reza Hafezi & Mohammad Alipour & Reza Parsaei Tabar & Rodney A. Stewart, 2021. "Residential Solar Water Heater Adoption Behaviour: A Review of Economic and Technical Predictors and Their Correlation with the Adoption Decision," Energies, MDPI, vol. 14(20), pages 1-26, October.
    13. Nketiah, Emmanuel & Song, Huaming & Gu, Tao & Adjei, Mavis & Adu-Gyamfi, Gibbson & Obuobi, Bright, 2024. "How willing are residents to accept sustainable energy from food waste generated by anaerobic digestion projects?," Energy, Elsevier, vol. 298(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    2. Stamatios Ntanos & Grigorios Kyriakopoulos & Miltiadis Chalikias & Garyfallos Arabatzis & Michalis Skordoulis, 2018. "Public Perceptions and Willingness to Pay for Renewable Energy: A Case Study from Greece," Sustainability, MDPI, vol. 10(3), pages 1-16, March.
    3. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    4. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    5. Xie, Bai-Chen & Zhao, Wei, 2018. "Willingness to pay for green electricity in Tianjin, China: Based on the contingent valuation method," Energy Policy, Elsevier, vol. 114(C), pages 98-107.
    6. Anna Kowalska-Pyzalska, 2019. "Do Consumers Want to Pay for Green Electricity? A Case Study from Poland," Sustainability, MDPI, vol. 11(5), pages 1-20, March.
    7. Bae, Jeong Hwan & Rishi, Meenakshi & Li, Dmitriy, 2021. "Consumer preferences for a green certificate program in South Korea," Energy, Elsevier, vol. 230(C).
    8. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    9. Anna Kowalska-Pyzalska & David Ramsey, 2018. "Household willingness to pay for green electricity in Poland," HSC Research Reports HSC/18/04, Hugo Steinhaus Center, Wroclaw University of Technology.
    10. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
    11. Gianluca Grilli, 2017. "Renewable energy and willingness to pay: Evidences from a meta-analysis," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2017(1-2), pages 253-271.
    12. Masako Numata & Masahiro Sugiyama & Wunna Swe & Daniel del Barrio Alvarez, 2021. "Willingness to Pay for Renewable Energy in Myanmar: Energy Source Preference," Energies, MDPI, vol. 14(5), pages 1-17, March.
    13. Will, Christian & Lehmann, Nico & Baumgartner, Nora & Feurer, Sven & Jochem, Patrick & Fichtner, Wolf, 2022. "Consumer understanding and evaluation of carbon-neutral electric vehicle charging services," Applied Energy, Elsevier, vol. 313(C).
    14. Dagher, Leila & Harajli, Hassan, 2015. "Willingness to pay for green power in an unreliable electricity sector: Part 1. The case of the Lebanese residential sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1634-1642.
    15. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    16. Qingbin Wang & Laurel Valchuis & Ethan Thompson & David Conner & Robert Parsons, 2019. "Consumer Support and Willingness to Pay for Electricity from Solar, Wind, and Cow Manure in the United States: Evidence from a Survey in Vermont," Energies, MDPI, vol. 12(23), pages 1-13, November.
    17. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    18. Fang, Xingming & Wang, Lu & Sun, Chuanwang & Zheng, Xuemei & Wei, Jing, 2021. "Gap between words and actions: Empirical study on consistency of residents supporting renewable energy development in China," Energy Policy, Elsevier, vol. 148(PA).
    19. Ayodele, T.R. & Ogunjuyigbe, A.S.O. & Ajayi, O.D. & Yusuff, A.A. & Mosetlhe, T.C., 2021. "Willingness to pay for green electricity derived from renewable energy sources in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    20. Bakkensen, Laura & Schuler, Paul, 2020. "A preference for power: Willingness to pay for energy reliability versus fuel type in Vietnam," Energy Policy, Elsevier, vol. 144(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:214:y:2021:i:c:s0360544220321885. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.