Review of company surveys of consumer willingness to pay to reduce the impacts of transmission infrastructure on visual amenity

Practice area: Competition & Antitrust | Consumer and firm behaviour | Consumer behaviour and protection | Energy | Energy economics | Public Policy | Regulatory economics
Client: Ofgem
Published: October, 2011
Keywords: qualitative analysis quantitative analysis

In the context of potential measures to reduce the visual amenity impacts of existing transmission infrastructure, this London Economics study for Ofgem provides a critical review of willingness to pay evidence provided to Ofgem by the transmission operators. The first step of the review involved determining a current best practice model for WTP studies assessing visual amenity. This was based on existing best practice guidance developed by public bodies and up-to-date academic literature.

A desktop review of the evidence supplied in the TO business plans was then undertaken in order to provide a critical review of the willingness to pay evidence provided. In undertaking the review the evidence provided was compared to the best practice model for WTP studies. The study also provides advice to Ofgem on using the evidence provided by the transmission operators to set an appropriate allowance for each company.