The aim of this article is to analyze theoretically whether changes in an access charge pricing policy can promote green electricity use. The model considers two hypothetical firms: One firm offers green electricity product, and the other firm provides conventional electricity. Each firm pays an access charge to the natural monopoly in order to have access to the transportation network. Through using a vertical differentiation model, we try to analyze the link between the access charges paid by the two firms and the qualities offered. We also attempt to explain why the consumers do not often choose green electricity. Finally, we suggest a new policy that can lead the consumers to choose the green electricity product instead of conventional electricity. Our model shows that changes in the access charge pricing policies can constitute a relevant component in the reforms of the electricity sector and can have impacts on the consumption of the green electricity. A differentiating access charge policy could allow a better penetration of the green electricity product and an increase in the social welfare when consumers have greater preferences in environmental qualities. Otherwise, their preservation at a uniform level is desirable in order to maintain the competition.
ArmstrongM., & DoyleCh. (1995). The economics of access pricing. Department of Applied Economics, University of Cambridge, Cambridge.
2.
AshworthP. (2011). Reducing energy demand: The imperative for behavioural change. In CleughH., SmithM. S., BattagliaM., & GrahamP. (Eds), Climate change: Science and solutions for Australia (pp. 127–134). CSIRO Publishing.
3.
AshworthP., PisarskyA., & LittleboyA. (2006). Understanding and incorporating stakeholder perspectives to low emissions technologies in Queensland. Center for Low Emission Technology.
4.
BatleyS., ColbourneD., FlemingP., & UrwinP. (2001). Citizen versus consumer: Challenges in the UK green power market. Energy Policy, 29(6), 479–487.
5.
BrécardD. (2015). Consumer misperception of eco-labels, green market structure and welfare[FAERE Working Papers. 01/2015]. French Association of Environmental and Resource Economists.
6.
ClarkC. F., KotchenM. J., & MooreM. R. (2003). Internal and external influences on pro-environmental behavior: Participation in a Green Electricity Program. Journal of Environmental Psychology, 23, 237–246.
7.
COM (2019). The European green deal. COM(2019) 640 Final.
8.
ConteM. N., & JacobsenG. D. (2014). When do voluntary environmental programs succeed? Evidence from Green Electricity and all US utilities [Working Paper]. https://www.semanticscholar.org/paper/When-Do-Voluntary-Environmental-Programs-Succeed-U-Conte-Jacobsen/f7daff6628c34eaf4484625a42e333f254473750
9.
GanL., EskelandG. S., & KolshusH. H. (2007). Green electricity market developments lessons from Europe and US. Energy Policy, 35(1), 144–155.
10.
GlachantJ. M. (2002). L’approche néo-institutionnelle de la réforme des industries de réseaux. Revue Économique, Programme National Persée, 53(3), 425–435.
11.
GreenPower. (2014). National GreenPower Accreditation Program Status Report: Quarter 1: 1 January to 31 March, 2014. https://www.greenpower.gov.au/sites/default/files/2020-09/GreenPower%20-%20Quarterly%20Report%20Q1%202014.pdf
12.
GreenR. (1997). Electricity transmission pricing: An international comparison. Utilities Policy, 6(3), 177–184.
13.
GüneyT. (2019). Renewable energy, non-renewable energy and sustainable development. International Journal of Sustainable Development & World Ecology, 26(5), 389–397, https://doi.org/10.1080/13504509.2019.1595214
14.
HanslaA., GambleA., JuliussonA., & GarlingT. (2008). Psychological determinants of attitudes towards and willingness to pay for green electricity. Energy Policy, 36, 768–774.
15.
HartmannP., & Apaolaza-IbanezV. (2012). Consumer attitude and purchase intention towards green energy brands: The role of psychological benefits and environmental concern. Journal of Business Research, 65, 1254–1263.
16.
HobmannE. V., & FredericksE. R. (2014). Barrier to green electricity subscription in Australia: ‘Love the environment, love renewable energy … but should I pay more?’Energy Research and Social Science, 3, 78–88.
LaffontJ. J., ReyP., & TiroleJ. (1997, February). Network Competition: Part I and Part [Document de travail 65]. Institut d’Economie Industrielle.
19.
LaffontJ. J., & TiroleJ. (1994). Access pricing and competition. European Economic Review, 38, 1673–1710.
20.
MenzF. C. (2005). Green electricity policies in the United States: Case study. Energy Policy, 33, 2398–2410.
21.
MussaM., & RosenS. (1978). Monopoly and product quality. Journal of Economic Theory, 18, 370–384.
22.
RoeB., TeislM. F., LevyA., & RussellM. (2001). US consumers’ willingness to pay for green electricity. Energy Policy, 29, 917–925.
23.
RonnenU. (1991). Minimum quality standard, fixed costs and competition. RAND Journal of Economics, 22(4), 490–504.
24.
Rundle-ThieleS., PaladinoA., & ApostolS. A. G.Jr. (2008). Lessons learned from renewable electricity marketing attempts: A case study. Business Horizon, 51(3), 181–190.
25.
SaidiK., & OmriA. (2020). The impact of renewable energy on carbon emissions and economic growth in 15 major renewable energy-consuming countries. Environmental Research, 186, 109567. https://doi.org/10.1016/j.envres.2020.109567
26.
SalmelaS., & VarhoV. (2006). Consumers in the green electricity market in Finland. Energy Policy, 34, 3669–3683.
27.
SangP., YaoH., ZhangL., WangS., WangY., & LiuJ. (2020). Influencing factors of consumers’ willingness to purchase green housing: A survey from Shandong Province, China. Environment, Development and Sustainability, 22, 4267–4287. http://sci-hub.tw/10.1007/s10668-019-00383-8
28.
TrufferB., MarkardJ., & WüstenhagenR. (2001). Eco-labeling of electricity-strategies and tradeoffs in the definition of environmental standards. Energy Policy, 31, 885–897.
29.
VerbruggenA., MoomawW., & NyboerJ. (2011). Annex I: Glossary, acronyms, chemical symbols and prefixes. In EdenhoferO.. (Eds), IPCC special report on renewable energy sources and climate change mitigation. Cambridge University Press.
30.
WelschH., & KuhlingJ. (2009). Determinants of pro-environmental consumption: The role of reference groups and routine behavior. Ecological Economics, 69, 166–176.
31.
WilsonC., & DowlatabadiH. (2007). Models of decision making and residential energy use. Annual Review of Environmental Resources, 32, 169–203.
32.
YoussefB, A., & AbderrazakC. (2009). Multiplicity of eco-labels, competition and the environment. Journal of Agricultural & Food Industrial Organization, 7(2). https://doi.org/10.2202/1542-0485.1271
33.
YoussefB. A., & Lahmandi-AyedR. (2008). Eco-labeling, competition and environment: Endogenization of labeling criteria. Environmental and Resource Economics, 41, 133–154.
34.
YunT., ChoG. L., & KimJ-Y. (2016). Analyzing economic effects with energy mix changes: A hybrid CGE model approach. Sustainability, 8(10), 1048.
35.
ZahoY., TangK. K., & WangL. L. (2013). Do renewable electricity policies promote renewable electricity generation? Evidence from panel data. Energy Policy, 62, 887–897.
36.
ZarnikauJ. (2003). Consumer demand for ‘green power’ and energy efficiency. Energy Policy, 31, 1661–1672.
37.
ZhouD., SpencerB., & VertinskyI. (2001). Strategic trade policy with endogenous choice of quality and asymmetric costs. Journal of International Economics, 56, 205–232.
