What is the willingness to pay for green electricity in Norway? A perspective on Guarantees of Origin.

Norway is one of the only countries in the world producing its electricity from almost only renewable resources. The Renewable Energy Directive 2001/77/EC (2001) introduced a system of Guarantees of Origin (GOs) as an incentive system for power producers and a tracking system of the renewable electricity consumption in Europe. It is mandatory to purchase GOs to be able to claim any renewable electricity consumption. A low demand for GOs results in only 18 percent (2019) of the renewable electricity being purchased in Norway and the remainings being exported in Europe making Norway the largest exporter of GOs. Consequently, the electricity consumed by Norwegians is not as renewable as believed. Thus, in this thesis we tried to figure out if the low demand has roots in low knowledge about GOs or not. Furtheremore, we aimed to estimate their maximum willingness to pay and factors affecting it. In order to achieve these aims, we used contingent valuation method survey. The survey introduces GOs through a scenario and simplified example, followed by a payment card as the elicitation method. The data is further analyzed by Logistic Regression, Ordinal Logistic Regression, and Interval Regression to gain more in-depth insight about factors affecting willingness to buy (WTB) and willingness to pay (WTP). The results show that most respondents are neither aware of Norway’s green electricity production nor GOs. Nevertheless, after being informed about GOs, most of the respondents without prior knowledge were willing to buy these with an average WTP of 5 to 9 percent of their electricity bill. The most critical factors affecting respondents’ WTB are gender, age, heating source, social media behavior, beliefs and behaviors towards the environment, car type, and prior knowledge about GOs. The models regarding WTP indicate that the most vital factors are education, heating source, employment status, beliefs and behavior toward the environment, social media behavior, and satisfaction with the electricity provider