Do people put more value on electricity produced using waste-to-hydrogen? Findings from South Korea

Abstract

South Korea is pushing for the waste-to-hydrogen (W2H) project to reduce greenhouse gases and utilize plastic and vinyl waste (PVW) while reducing environmental pollution from PVW. This research seeks to estimate additional willingness to pay (WTP) for electricity produced using W2H over that produced using traditional power sources, such as coal and nuclear. For the purpose of the estimation, a contingent valuation survey of 1000 people was performed employing the closed-ended one-and-one-half-bound question during November 2020. A spike model is utilized to reflect zero WTP values that a number of interviewees reported in the survey. Several factors affecting the additional WTP were also analyzed to derive implications. The average WTP was computed as KRW 27.7 (USD 0.025) per kWh with statistical significance, which reaches 26.4% of the electricity price. One more point to note is that 54.3% of the respondents stated a zero WTP as they thought that W2H is of no value to them or were worried that the W2H project could increase electricity bills.