Germany's Energiewende: A Tale of Increasing Costs and Decreasing Willingness-To-Pay

This paper presents evidence that the accumulating cost of Germany's ambitious plan to transform its system of energy provision—the so-called Energiewende—is butting up against consumers' willingness-to-pay (WTP) for it. Following a descriptive presentation that traces the German promotion...

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Bibliographic Details
Published in:The Energy journal (Cambridge, Mass.) Mass.), 2017-01, Vol.38 (1_suppl), p.211-228
Main Authors: Andor, Mark A., Frondel, Manuel, Vance, Colin
Format: Article
Language:English
Subjects:
Alternative energy sources
Clean energy
Consumers
Consumption data
Economic aspects
Electric power
Electricity
Energy
Energy costs
Energy policy
Energy technology
Forecasts and trends
Households
Nuclear energy
Planning
Renewable energy
Renewable energy technologies
Renewable resources
Residential energy
Respondents
Willingness to pay
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Summary:This paper presents evidence that the accumulating cost of Germany's ambitious plan to transform its system of energy provision—the so-called Energiewende—is butting up against consumers' willingness-to-pay (WTP) for it. Following a descriptive presentation that traces the German promotion of renewable energy technologies since 2000, we draw on two stated-preference surveys conducted in 2013 and 2015 that elicit the households' WTP for green electricity. Two models are estimated, one based on a closed-ended question framed around Germany's target of 35% renewable energy in electricity provision by 2020, and the other on an open-ended format that captures changes in WTP over time. To deal with the bias that typifies hypothetical responses, the models distinguish respondents according to whether they express definite certainty in their reported WTP. The results from both models reveal a strong contrast between the households' general acceptance of supporting renewable energy technologies and their own WTP for green electricity.
ISSN:0195-6574
1944-9089
DOI:10.5547/01956574.38.SI1.mand