The demand for green electricity amongst residential consumers in the Cape Peninsula

Oliver, Henry (2009-12)

Thesis (MBA (Business Management))--University of Stellenbosch, 2009.

Thesis

ENGLISH ABSTRACT: The purpose of this study is to determine whether residential electricity consumers within the Cape Peninsula would be willing to voluntarily purchase green electricity if it is sold at a premium price. International experience in the field of green marketing shows that while niche markets for green electricity clearly existed, few programmes however exceeded a 5% penetration in the residential market. This study therefore methodologically drew on recent development in the literature of norm-motivated behaviour to identify testable factors that could influence residential consumers’ willingness to purchase premium-priced green electricity. After identifying these core testable factors, they were used to test various hypotheses. This was done through the testing of primary data that was collected through a telephone market survey of 405 respondents within the Cape Peninsula. These respondents were all identified as financial decision makers within their electricity consuming households. This study subsequently found that residential electricity consumers in the Cape Peninsula are very concerned about the future of the environment and that a large percentage of them (more than 40%) from almost all income levels might voluntary buy premium-priced green electricity. However, as it did identify that consumers must truly be convinced of the positive effects that green electricity would have on the environment before voluntarily supporting such a campaign, it found that consumers might not be well enough informed on environmental and climate change issues to ensure their actual support. To be at all successful, such a green electricity marketing campaign should be very informative and specifically focused on the positive effects that such a purchase would have on the environment. This study also found that supportive residential consumers would on average be willing to pay a maximum premium of 26% or approximately 15c/kWh. The combined maximum potential value of these premiums amount to R39 million per month. This serves as indication that there is much room for future development of the green electricity market. This study also identified that the majority of residential consumers believe that excessive users of electricity should be forced to make a larger financial contribution towards the generation of green electricity than low usage consumers. Based on its findings, the study closes with recommendations to role players in the green electricity market, i.e. the City of Cape Town Municipality, Darling Wind Farm and Eskom.

AFRIKAANSE OPSOMMING: Die doel van hierdie studie is om te bepaal of residensiële elektrisiteitsverbruikers in die Kaapse Skiereiland gewillig sou wees om vrywilliglik groen elektrisiteit teen ’n premie aan te koop. Internasionale ervaring op die gebied van groen elektrisiteit het getoon dat, alhoewel daar verseker nismarkte vir groen elektrisiteit bestaan, baie min programme meer as 5% van die residensiële mark kon wen. Hierdie studie steun dus metodologies op onlangse verwikkelinge in die literatuur rakende normgemotiveerde gedrag om sodoende toetsbare faktore te identifiseer wat moontlik verbruikers se bereidwilligheid om groen elektrisiteit teen ’n premie te koop, kan verbeter. Na die identifisering van hierdie toetsbare faktore is hulle gebruik om verskeie hipoteses te toets. Dit is gedoen deur die toets van primêre data wat deur middel van telefoon-marknavorsing by 405 respondente binne die Kaapse Skiereiland ingesamel is. Hierdie respondente was almal geïdentifiseer as finansiële besluitnemers van huishoudings wat elektrisiteit gebruik. Hierdie studie het bevind dat residensiële elektrisiteitsverbruikers in die Kaapse Skiereiland baie besorg is oor die toekoms van die omgewing en dat ’n groot hoeveelheid van hierdie huishoudings (meer as 40%) van amper alle inkomstegroepe moontlik gewillig sou wees om groen elektrisiteit teen ’n premie aan te koop. Die studie het ook bevind dat omdat hierdie bereidwilligheid van die residensiële verbruikers onderhewig is aan hul oortuiging dat groen elektrisiteit ’n werklike positiewe effek op die omgewing uitoefen, residensiële verbruikers dalk huidiglik nie werklik goed genoeg ingelig is rakende omgewingsbewaring- en klimaatsveranderingskwessies nie. Hierdie gebrek aan kennis kan dus moontlik hul bereidwilligheid om groen elektrisiteit teen ’n premie aan te koop, negatief beïnvloed. Om suksesvol te wees sal groen elektrisiteit-bemarkingsveldtogte baie volledige inligting moet verskaf en sterk gefokus moet wees op die omgewingsvoordele wat die aankoop van groen elektrisiteit inhou. Die studie het ook bevind dat residensiële ondersteuners bereid sou wees om gemiddeld ’n maksimum premie van 26% of 15c/kWh te betaal. Die gesamentlike maksimum potensiële waarde van hierdie premies is R39 miljoen per maand wat daarop dui dat daar heelwat ruimte mag wees vir toekomstige uitbreiding van die mark vir groen elektrisiteit. Hierdie studie het ook geïdentifiseer dat die meerderheid residensiële elektrisiteitsverbruikers glo dat oormatige elektrisiteitsverbruikers gedwing moet word om ‘n groter finansiële bydrae tot die opwekking van groen elektrisiteit te maak as lae elektrisiteitsverbruikers. Gebaseer op die bevindinge van hierdie studie, sluit dit af met aanbevelings tot verskeie rolspelers in die mark vir groen elektrisiteit, soos die Kaapstadse Munisipaliteit, Darling Windplaas en Eskom.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/921
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