Positive and Negative Externalities from Renewable and Conventional Power Plants in the Backyard: The Value of Participation

33 Pages Posted: 29 Aug 2022

See all articles by Christin Hoffmann

Christin Hoffmann

Brandenburg University of Technology (BTU)

Eddy Jalbout

affiliation not provided to SSRN

Monica Villanueva

affiliation not provided to SSRN

Taimyra Batz Liñeiro

affiliation not provided to SSRN

Felix Müsgens

affiliation not provided to SSRN

Abstract

We quantify the net external effects of conventional and renewable electricity generators by analyzing housing prices in their vicinity. Using a Differences-in-Differences approach, we find that (1) wind turbines reduce prices significantly, (2) solar fields have no significant impact, and (3) conventional plants over 1 km away show positive net effects. We set out to explain this result by disentangling the positive local external effects of energy generation, which we measure in terms of local purchasing power and tax revenues. Our results show that the commissioning of conventional power stations results in a significant increase in both purchasing power and business tax income in the vicinity. We thus conclude that significant financial participation of the local public in the development of renewable energy projects, especially wind turbines, could be key to increasing their acceptance and accelerating their expansion.

Keywords: Renewable energy, Conventional power plants, Hedonic valuation, Difference-in-Differences, Wind turbines, Solar fields, Financial participation, Acceptance

Suggested Citation

Hoffmann, Christin and Jalbout, Eddy and Villanueva, Monica and Batz Liñeiro, Taimyra and Müsgens, Felix, Positive and Negative Externalities from Renewable and Conventional Power Plants in the Backyard: The Value of Participation. Available at SSRN: https://ssrn.com/abstract=4203184 or http://dx.doi.org/10.2139/ssrn.4203184

Christin Hoffmann (Contact Author)

Brandenburg University of Technology (BTU) ( email )

PO Box 101344
Cottbus, 03013
Germany

Eddy Jalbout

affiliation not provided to SSRN ( email )

No Address Available

Monica Villanueva

affiliation not provided to SSRN ( email )

No Address Available

Taimyra Batz Liñeiro

affiliation not provided to SSRN ( email )

No Address Available

Felix Müsgens

affiliation not provided to SSRN ( email )

No Address Available

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