How French Households Value their Electricity Supply Choices
This session presents the results of a discrete choice experiment conducted in early 2003 where 503 households from the French region of Auvergne-Rhône-Alpes were surveyed regarding their willingness to pay (WTP) for different combinations of renewable ('green') electricity, local electricity and autonomy (self-sufficiency). In addition, electric power could be purchased from (i) the national grid, (ii) a solar PV system in their home, or (iii) by joining a nearby energy community, i.e. an interconnected microgrid. In addition to their supply choices, which were individual calibrated to take account of their monthly electricity consumption and payment, data was collected on respondents' beliefs, attitudes and knowledge of the electricity sector. A conditional logit regression of their responses suggests positive valuations for all attributes and sources with the notable exception of the local attribute, which was frequently neglected by respondents even when supplied free of charge. Two additional models that controlled for zero-inflation in the data identified statistically significant correlations with household, demographic, and psychological factors, though not the usual ones that include income, consumption, age or education.
Key Learning Points:
- There is untapped market demand for alternative supply sources of electricity, and willingness to pay a premium for the "right" combination of attributes
- The 'local' attribute appears to be severely undervalued by the interviewed households. This finding has only been partially explained
- Prioritizing feasibility and realism in the design of the survey strongly influenced the subsequent data treatment and results
Adrián Ruiz Carvajal,PhD
Founder / Director
Nexus 3
Dr. Ruiz Carvajal has over 10 years of experience in the energy sector, working as technical advisor for energy efficiency and climate at the German Agency for International Cooperation (GIZ), as deputy director for clean energy regulation at Mexico's Energy Regulatory Commission (CRE) and as energy policy advisor at Tetra Tech, in addition to consulting roles for the public and private sectors. He is also the founder and director of Nexus 3, a consultancy focusing on energy, environment and economics. Dr. Ruiz Carvajal earned his bachelor in environmental engineering from the Universidad de las Américas - Puebla, Mexico, his masters degree from the Technical University of Freiberg, Germany, and his Ph.D. in energy economics from the Université Grenoble Alpes in France.
Founder / Director
Nexus 3
Dr. Ruiz Carvajal has over 10 years of experience in the energy sector, working as technical advisor for energy efficiency and climate at the German Agency for International Cooperation (GIZ), as deputy director for clean energy regulation at Mexico's Energy Regulatory Commission (CRE) and as energy policy advisor at Tetra Tech, in addition to consulting roles for the public and private sectors. He is also the founder and director of Nexus 3, a consultancy focusing on energy, environment and economics. Dr. Ruiz Carvajal earned his bachelor in environmental engineering from the Universidad de las Américas - Puebla, Mexico, his masters degree from the Technical University of Freiberg, Germany, and his Ph.D. in energy economics from the Université Grenoble Alpes in France.