Simona Bigerna - The Economic Valuation of Green Electricity

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The aim of the book is to analyze the relationship between renewable (or green) electricity and citizens, focusing on both the demand side and the supply side. Today the consequences of the use of fossil energy are seen from a different perspective because issues related to climate change are evident worldwide. Thus, climate change and resource depletion are real problems to be addressed for the welfare of society. Renewable energy sources are essential to reduce polluting emissions, but they can produce a range of environmental effects, which might be detrimental to human activities, as attested to by several types of Not in My Back Yard (NIMBY) reactions. This is because renewable energy infrastructure siting usually implies several pros and cons to the local stakeholders involved in the projects. For example, in Italy, according to the last report available in 2016 (Nimbyforum 2017), there are 359 contested facility projects and, among these, 45% involve renewable energy.

Nevertheless, empirical evidence (from the Eurobarometer survey, among other sources) shows that in Italy, as in several European countries, citizens are willing to pay a significant amount to produce renewable electricity. Renewable electricity production involves citizens from two opposite points of view. Indeed, they are involved both as end users and as stakeholders in the construction of the facilities and in the local production process. In this book we analyze this dual role played by citizens in order to evaluate the actual and global public acceptance of renewable electricity generation in Italy.

We address a specific and important area of the economic analysisthe stated preferences methodfocusing on two welfare measures: willingness to pay and willingness to accept.

Consequently, the research evaluates the attitudes of citizens toward the end use of renewable electricity and the likelihood of acceptance of new infrastructure related to renewable electricity generation. Our aim is not to consider all technologies; we focus only on site-specific cases that involve siting controversies. To do this we focus on empirical results in Europe, including Italian case studies, comparing them with our contingent valuation field experiments. Furthermore, in our empirical analysis we explicitly take into account the uncertainty associated with the respondents in order to obtain more robust results.

The book, therefore, is not about how to reconcile consumers and citizens behavior regarding renewable electricity consumption and production; rather, it explores the main determinants of peoples behavior, on the two sides of the market, for better understanding of this phenomenon, to obtain useful information for public and private decision makers. The structure of the book is as follows.

In Chap. we use a meta-analysis to collect and analyze related literature about renewable electricity adoption, taking into account the double role played by the citizens. The main determinants of citizens behavior are analyzed for better understanding of the renewable electricity adoption process.

In Chap. we investigate whether existing wind farms affect respondents attitudes and perceptions toward potential enlargement of wind farms, using a contingent valuation method. We explicitly take into account the existence of respondents heterogeneity in perceiving the new project externalities referring to potential land use conflicts and local opposition. To do this, we use both willingness to pay and willingness to accept measures, and we also appraise the impact of uncertainty, taking into account several degrees of uncertainty, using the numerical scale method.

In Chap. we estimate Italian households willingness to pay for renewable electricity, comparing our results with those of other similar studies conducted worldwide. Furthermore, we use two approaches to treat uncertainty, appraising consumers willingness to pay for renewable electricity, to provide more robust results.