Valuing the environmental impacts of wind power : a choice experiment approach

Abstract: There exists a political goal in Sweden to increase the use of renewable energy, and wind power seems to be a favorable choice from an environmental perspective. Although the public generally expresses a positive attitude towards wind power, specific projects often face resistance from the local population. This study aims at examining the general attitude towards wind power among Swedish house owners, and in particular at analyzing their valuation of the external impacts associated with wind power using a choice experiment approach. A postal survey was sent out to 1000 Swedish residential homeowners. The non-monetary attributes included in the choice experiment were: the noise level, location, height, and the grouping of windmills. An electricity price change was included as a cost attribute. According to the results wind power incurs external costs, and the impacts represented by the noise, location, group, and the price change attributes all had statistically significant effects on the utility of the average respondent. Among the non-monetary attributes, the location of windmills seems to have the biggest impact on the utility of the respondents, i.e., the highest implicit price. The average respondent perceives wind power capacity located offshore as a change for the better while locating windmills in the mountains is perceived as a change for the worse, all compared to a location onshore. In addition, the respondents appear to be willing to pay a positive amount to avoid large wind farms. Furthermore, noise reductions are considered as improvements and lower electricity prices are preferred over higher, as is to be expected. However, there is no evidence that the height of windmills affects the utility of the average respondent. Hence, if the environmental external costs associated with wind power are to be minimized, our results suggest that new schemes should be located offshore rather than in the mountains and that large wind farms should be avoided. This also provides important lessons for wind power producers who wish to market wind power as a "green" electricity source and adapt their generation portfolio accordingly. However, all future measures towards decreasing the external impacts of wind power must be relatively low- cost; according to the results the Swedish house owners are cost conscious and prefer low electricity prices over higher.