Rommel, Jens
- Leibniz Centre for Agricultural Landscape Research (ZALF)
Abstract
Consumers can choose from a wide range of electricity supply contracts, including green power options. Electricity produced from renewable energy involves information asymmetries. With a sample of more than 2,000 German electricity consumers, we tested the proposition of a "lemon market" for renewable energy in a discrete choice experiment. Specifically, we found that, compared to investor-owned firms, additional willingness-to-pay for renewable energy is approximately double when offered by cooperatives or municipally-owned electricity utilities. Consumers who are experienced with switching suppliers have an additional willingness-to-pay of one Eurocent per kilowatt hour for cooperatives and two Eurocents for public enterprises. The results demonstrate that organizational transformation in dynamically-changing electricity markets is not only driven by political initiatives but also by consumers' choices on the market. Public policy may reduce information asymmetries by promoting government labeling of green energy products. (C) 2016 Elsevier Ltd. All rights reserved.
Keywords
Cooperatives; Discrete choice experiment; Energy transition; Germany; Willingness-to-Pay
Published in
Renewable Energy
2016, volume: 94, pages: 106-113
SLU Authors
UKÄ Subject classification
Economics
Publication identifier
- DOI: https://doi.org/10.1016/j.renene.2016.03.049
Permanent link to this page (URI)
https://res.slu.se/id/publ/95690