Heterogeneous consumer preferences for carbon neutral electricity generation

Abstract

Cutting back carbon dioxide emissions in power generation is an important step in the battle against climate change. Understanding heterogeneous consumer preferences for generation technologies is important, as this can help both energy companies and policy makers take appropriate decisions. This study aims to identify consumer preferences for carbon neutral generation technologies and link these preferences to respondents’ characteristics, knowledge on nuclear energy and climate change, as well as concerns about these topics and political preferences. We estimate a latent class logit model on data from a stated choice experiment among 583 Dutch and Flemish respondents. Three classes could be distinguished in the sample. All classes value renewables over both other techniques; two classes are in favour of nuclear energy compared to fossil fuels with CCS and one class prefers both renewables and fossil fuels with CCS over nuclear energy. The probability to belong to a certain class differs across political preferences and concerns about nuclear energy, climate change or future generations. The results indicate that respondents are willing to pay more for renewable energy than for nuclear energy or fossil fuels with CCS, despite the realization of full decarbonization in each scenario.

Keywords

• Stated Choice Experiment (SCE)
• Willingness to pay
• Latent class analysis
• Energy transition