Valuing the attributes of renewable energy investments

A. Bergmann, N. Hanley, R.E. Wright

Research output: Contribution to journalArticle

256 Citations (Scopus)

Abstract

Increasing the proportion of power derived from renewable energy sources is becoming an increasingly important part of many countries's strategies to achieve reductions in greenhouse gas emissions. However, renewable energy investments can often have external costs and benefits, which need to be taken into account if socially optimal investments are to be made. This paper attempts to estimate the magnitude of these external costs and benefits for the case of renewable technologies in Scotland, a country which has set particularly ambitious targets for expanding renewable energy. The external effects we consider are those on landscape quality, wildlife and air quality. We also consider the welfare implications of different investment strategies for employment and electricity prices. The methodology used to do this is the choice experiment technique. Renewable technologies considered include hydro, on-shore and off-shore wind power and biomass. Welfare changes for different combinations of impacts associated with different investment strategies are estimated. We also test for differences in preferences towards these impacts between urban and rural communities, and between high- and low-income households.
Original languageEnglish
Pages (from-to)1004-1014
Number of pages10
JournalEnergy Policy
Volume34
Issue number9
DOIs
Publication statusPublished - 2007

Keywords

  • renewable energy
  • external costs
  • external benefits
  • choice experiments
  • economics
  • energy policy

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