Exposure to wind turbines, regional identity and the willingness to pay for regionally produced electricity

• Published in: Resource and energy economics 2022-11, Vol.70, p.101332, Article 101332
• Main Author: Groh, Elke D.
• Format: Article
• Language: English
• Subjects: Electricity contract choice; Proximity to wind turbines; Regional electricity; Regional identity; Stated choice experiment
• ISSN: 0928-7655; 1873-0221
• DOI: 10.1016/j.reseneeco.2022.101332

To reduce greenhouse gas emissions the expansion of renewable energies is vital. However, negative externalities in the regions where wind turbines are installed raise local opposition. A promising way to promote the installation of regional energy plants is the use of regional electricity labels. This paper examines if there is a willingness to pay for regionally produced electricity and whether the willingness to pay is related to exposure to wind turbines or causally affected by regional identity. To that end, this study is based on a large-scale survey among more than 1800 individuals in Germany including a combined priming and stated choice experiment on electricity contracts in combination with official data on wind turbines. The results of the econometric analysis reveal a highly significant willingness to pay a price premium for regional electricity contract attributes. In addition, we find no empirical evidence for a relationship between the exposure to wind turbines and the willingness to pay for regionally produced electricity. Furthermore, the estimation results provide evidence that regional identity reduces the willingness to pay for regionally produced electricity. The results have implications for public policy as well as commercial enterprises. •We examine the willingness to pay for regional electricity contract attributes.•We use data from a combined stated choice and priming experiment.•Respondents are willing to pay a price premium for regionally produced electricity.•We find no evidence for (inversed) NIMBY effects in electricity contract choice.•Regional identity reduces preferences for regionally produced electricity.