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Title:Households' WTP for the reliability of gas supply PDF Logo
Authors:Chou, Wan-jung
Bigano, Andrea
Hunt, Alistair
la Branche, Stephane
Markandya, Anil
Pierfederici, Roberta
Issue Date:2011
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Energy: Resources and Markets 58.2011
Abstract:The security of natural gas supply is an important issue for all EU countries due to the region's heavy dependence on imported supply sources and in light of energy demand for gas that is continuously increasing. Discussions have emphasised strategies for securing the supply at the macro level, e.g. diversification in supply sources, increase in storage capacity, etc. By contrast, consumers' demand for the reliability of gas supply is rarely investigated. Hence this study was conducted to examine the economic implications associated with the security of gas supply directly to domestic consumers. Based on the choice experiment approach, household surveys were conducted in France, Italy and the UK. The results confirmed that the degree of the economic impact of a disruption of gas supply to domestic consumers was a function of the duration of a supply disruption and the season in which a supply cut would take place, as well as other preferences of consumers. The willingness to pay to secure per unit of gas consumption, or alternatively the costs of gas unsupplied, was estimated at between €2.65/cubic metre and €41.48/cubic metre across three different European countries.
Subjects:Energy Security
Gas Supply
Households
Willingness to Pay
Choice Experiment
EU
JEL:C35
C83
C93
D12
Q41
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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