Attribute Preferences and Economic Value of Green Electricity in Pakistan

Abstract

Huge reliance on thermal power for electricity generation, the power sector of Pakistan has become significant contributor to GHG emissions. Government has plans to improve and upgrade the electricity infrastructure through generating more electricity from renewable energy sources. In order to evaluate the economic benefits which people are expected to gain if different sources of green electricity are incre0ased in the system and their preferences for any specific renewable energy sources are aimed in this study. The objectives of this study were explored by employing choice experiment (CE). The respondents were divided into two broad categories of urban and rural. Three main sources of green electricity (Hydroelectricity, wind and solar) along with load shedding attribute were explored. The Conditional Logit Model and Mixed Logit Models were employed to identify the consumer's preferences and estimation of the marginal values. Results showed that the urban and rural consumers chose solar as the most preferred source and marginal values for this source is 0.17 cents per kWh consumption and 0.19 cents per kWh consumption in urban and rural models respectively.