André Hackbarth and Sabine Löbbe

European University Association Attitudes, preferences, and intentions to participate in peer-to-peer electricity trading: The case of Southwest German households • André Hackbarth and Sabine Löbbe • Reutlingen Energy Center for Distributed Energy Systems and Energy Efficiency, Reutlingen University • BIEE Research Conference, 18 September 2018, Oxford, UK

Outline Motivation Research goals Prior research Data and methodology Results Summary and conclusions

Outline Motivation Research goals Prior research Data andmethodology Results Summary andconclusions

Motivation • Status Quo • Share of renewable electricity of 36.2% in 2017 (AGEB, 2018) • About 1.7 million renewable electricity producers (Bundesnetzagentur, 2018) • 31.5% of the production capacities owned by private households (TrendResearch, 2016) • Governmental support and market development • ‘German Renewable Energy Sources Act’ introduced fixed feed-in tariffs for renewable electricity in 2000, guaranteed for a period of 20 years Subsidization runs out for first renewable generationElectricity has to be used entirely on site or sold/shared by producers • Perspectives for innovation: Cooperative virtual and decentral market places for peer-to-peer (P2P) energy trading and sharing, supported by EU (EC, 2016) • Research activities • Consumer research concerning P2P electricity trading still scarce • Exception: Reuter andLoock (2017), using survey data from 830 respondents in Germany, Switzerland, Norway and Spain to assess participation in local energy markets

Research goals • Identification of private energy consumer and prosumer segments willing to participate in P2P electricity trading • Socio-demographic and household characteristics • Motivationsandattitudes • Product attribute preferences • Quantificationoftheirinfluence on decisionmakingprocess • Description of the implications for marketing strategies of energy suppliers

Prior research (I) • Research on households’ drivers and barriers for participating in P2P electricity trading still scarceRelatedresearchfields

Prior research (II) • Summary of main influencing factors

Data and methodology Data Methodology • Survey carried out in April and May 2017 among 100,756 customers of seven municipal utilities mainly located in Southwest Germany • Aimed at assessment of energy-related products: bundle products, smart home, domestic microgeneration, and P2P electricity trading • Distributed in paper-pencil version and web-based version • Supplier-specific response rate ranged from 1.3% to 21.2% with an average of about 7%, depending on means of delivery • 7,006 completed questionnaires in total, 4148 completed surveys available for analysis of P2P electricity trading • Multiple regression analysis to detect variables with significant influence on the dependent variables Purchase intention of P2P electricity trading products Openness towards P2P electricity trading products • Hierarchical multiple regression model to test incremental power of each retained significant predictor category

Results (I) – Hierarchical multiple regression: Purchase intention of P2P electricity trading • Notes:F = 254.983 (dfs = 13, 4134; significant at the p < 0.001 level); Adjusted R2 = 0.443; N = 4148.

Results (II) – Hierarchical multiple regression: Purchase intention of P2P electricity trading • Impact on purchase intention – standardized coefficients (descending order): • Openness towards P2P electricity trading (0.400), • Purchase intention of microgeneration (0.327) • Purchase intention of a bundle tariff (0.106) • Importance of energy costs (-0.067) • Knowledge about P2P electricity trading (0.065) • Importance of personal service (-0.055) • Importance of shared generation and consumption (0.052) • Importance of independence from energy supplier (-0.052) • Telecom company (0.050) • Time-of-use tariff (0.044) • Middle age (0.043) • Importance of easy implementation (0.039) • Importance of transparency of electricity generation (0.028)

Results (III) – Hierarchical multiple regression: Openness towards P2P electricity trading • Notes:F = 63.933 (dfs = 17, 3915; significant at the p < 0.001 level); Adjusted R2 = 0.214; N = 3933.

Results (IV) – Hierarchical multiple regression: Openness towards P2P electricity trading • Impact on general openness – standardized coefficients (descending order): • Attitude towards environment, regional production, and transparency (0.275) • P2P participants among acquaintances (0.169) • Utility evaluation (0.116) • Rented accommodation (0.084) • Independence from energy provider (0.080) • Social media as communication channel with the utility (0.068) • Knowledge about P2P electricity trading (0.066) • Prosumer (0.064) • Decision control (0.058) • Middle age (0.054) • Attitude change (0.053) • Higher education (0.051) • Price consciousness (0.047) • Lower income (0.045) • Family and friends as main energy-related information source (0.042) • Residential location (-0.036) • Regular provider change (0.033)

Outline Motivation Research goals Data andmethodology Results Summary andconclusions

Summary and conclusions (I) • P2P electricity trading still rather unknown product for many potential customers (85%); only 11% of respondents declared they intend to purchase product in upcoming two years • Most likely provider consumers would purchase from is (municipal) utility; telecom company significantly more often selected by interested customer segments • Low importance of socio-demographic and household characteristics in explaining differences between consumers (1-3%) • High explanatory power of attitudes, knowledge and likelihood to purchase further products • Openness towards P2P electricity trading has by far greatest direct influence on purchase intention and also acts as moderator

Summary and conclusions (II) • Most valuable target groups for P2P electricity trading are innovators and early adopters • Middle aged, higher educated, having lower income, live in (sub-)urban areas, being either home owners (prosumers/interested in microgeneration) or living in rented accommodations, having preferences for digital communication channels • Well-informed about and open towards P2P electricity sharing • Environmentally aware and favoring regional production, price conscious and regular changing provider, recently changed attitude towards energy • High importance of transparency, sharing generation and consumption, and easy implementation, to a lesser extent economic reasons • Intention to purchase related products (e.g. microgeneration, bundle or TOU tariffs)

Summary and conclusions (II) • Marketing efforts of incumbent publicly-owned regional/municipal utilities should • Use positive consumer evaluation and trust (safety, reliability, known partner) for development of new business models • Aim at innovators/early adopters with innovative lifestyle (signaling, ‘warm glow’) • Aim at (uninvolved) ‘pure’ consumers and tenants Crucial to realize functioning and lively P2P electricity trading community • Link easy-to-use digitalized services with (at least) the look and feel of personalized and P2P-based distribution and tailored communication • Create bundles with other products, e.g. electric mobility, microgeneration • Address added values based on fair pricing • Create emotionally framed information campaigns • Particularly take peer effects actively into account, as they have great influence on general openness towards and purchase intention for P2P electricity products • Future research • Detailed follow-up survey solely focusing on P2P electricity trading • Differentiated between consumers and prosumers and their specific interests and motivations

Thank you for your attention!Questions? • André Hackbarth • Tel: +49 7121 2717131 • Email: andre.hackbarth@reutlingen-university.de

Backup

Sample vs German population

PCA and PFA

Data

Data • Notes: 1 = The 5-point Likert scale ranges from '1 = strongly disagree' to '5 = strongly agree'; 2 = The 5-point Likert scale ranges from '1 = applies not at all' to '5 = applies fully'; 3 = The 5-point Likert scale ranges from '1 = not at all important' to '5 = very important'; 4 = The 5-point Likert scale ranges from '1 = very unlikely' to '5 = very likely'.

Data

Results – Hierarchical multiple regression: Purchase intention of P2P electricity trading • Impact on purchase intention – unstandardized coefficients (descending order): • Openness towards P2P electricity trading (0.589) • Purchase intention of microgeneration (0.289) • Knowledge about P2P electricity trading (0.188) • Middle age (0.093) • Importance of energy costs (-0.091) • Purchase intention of a bundle tariff (0.090) • Importance of personal service (-0.069) • Importance of easy implementation (0.060) • Importance of independence from energy provider (-0.056) • Importance of shared generation and consumption (0.055) • Telecom company (0.053) • Time-of-use tariff (0.036) • Importance of transparency of electricity generation (0.029)

Results – Hierarchical multiple regression: Openness towards P2P electricity trading • Impact on general openness – unstandardized coefficients (descending order): • Attitude towards environment, regional production and transparency (0.315) • P2P participants among acquaintances (0.141) • Utility evaluation (0.134) • Rented accommodation (0.131) • Knowledge about P2P electricity (0.130) • Prosumer (0.130) • Middle age (0.079) • Higher education (0.072) • Lower Income (0.064) • Information: Family and friends (0.061) • Independence from energy provider (0.056) • Communication: Social media (0.041) • Decision control (0.039) • Attitude change (0.033) • Residential location (-0.030) • Price consciousness (0.029) • Regular provider change (0.023)

André Hackbarth and Sabine Löbbe