Willingness-to-Pay of Converting a Centralized Power Generation to a Distributed Power Generation: Estimating the Avoidance Benefits from Electric Power Transmission

Abstract

Centralized power generation has been widely used for power generation due to its high efficiency, but its transmission and distribution facilities have caused a lot of economic and social costs. The distributed power generation, which produces electricity distributed around consumers without large transmission facilities, has emerged as an alternative. This study aims to derive the social costs and damage avoidance benefits of converting centralized into distributed power generation through willingness-to-pay (WTP) and find determinants that affect them. The economic and social damage caused by centralized power generation facilities is categorized into four types of damage, and the WTP for each type of damage is elicited using various types of quantitative, machine-learning models. Results show that people perceive health damage relief as the greatest benefit of the avoidance of centralized power generation facilities, and it accounted for 29~51% of the total WTP.