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Quantitatively exploring the future of renewable portfolio standard in the Korean electricity sector via a bottom-up energy model

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  • Choi, Dong Gu
  • Park, Sang Yong
  • Hong, Jong Chul

Abstract

The Republic of Korea started to apply a new renewable energy policy, renewable portfolio standard (RPS) in 2012, but the policy has failed to obtain positive evaluation and some problems have arisen during the first two years. In this study, we have tried to investigate the current design (operational mechanism) of the policy, to examine the reasons for its problems, and to quantitatively predict future outlook. For the examination and prediction, we use the bottom-up model approach, which has not been commonly used for the RPS policy but is usually utilized for evaluating specific policy options in an energy system. Therefore, the main purpose of this study is not only to introduce a new approach for the exploration of the RPS policy, a scenario-based quantitative analysis based on a bottom-up energy system model, but also to apply the approach into the policy in Korea. We develop a multi-regional bottom-up energy model and explicitly implement the mechanism of the policy in the model, such as the transfer of tradable attribute – Renewable Energy Certificates (RECs). The results of the model predict a serious disharmony of the current design of the policy under the national basic plan; the optimistic fulfillment rate of RECs in the entire mechanism will be around 66% in 2022, so the most regulated generators will suffer from the large shortfalls of RECs and the total penalty for all regulated generators will be expected up to 1350 billion KRW in 2022. We also diagnose the reasons of the disharmony as well as address some suggestions for its continued application. As the Korean case study, we believe that the approach in this study can be utilized when policy makers design or amend the mechanism of RPS with RECs to help the policy operate efficiently and to prevent potential undesirable consequences.

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  • Choi, Dong Gu & Park, Sang Yong & Hong, Jong Chul, 2015. "Quantitatively exploring the future of renewable portfolio standard in the Korean electricity sector via a bottom-up energy model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 793-803.
    • Handle: RePEc:eee:rensus:v:50:y:2015:i:c:p:793-803
    DOI: 10.1016/j.rser.2015.05.048
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    1. Xu, Jiuping & Yang, Guocan & Wang, Fengjuan & Shu, Kejing, 2022. "A provincial renewable portfolio standards-based distribution strategy for both power plant and user: A case study from Guangdong, China," Energy Policy, Elsevier, vol. 165(C).
    2. Seoungbeom Na & Kyeongseok Kim & Woosik Jang & Changgeun Lee, 2022. "Real Options Analysis for Land and Water Solar Deployment in Idle Areas of Agricultural Dam: A Case Study of South Korea," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    3. Kwag, Kyuhyeong & Shin, Hansol & Oh, Hyobin & Yun, Sangmin & Kim, Tae Hyun & Hwang, Pyeong-Ik & Kim, Wook, 2023. "Bilevel programming approach for the quantitative analysis of renewable portfolio standards considering the electricity market," Energy, Elsevier, vol. 263(PD).
    4. Wang, Hongye & Su, Bin & Mu, Hailin & Li, Nan & Gui, Shusen & Duan, Ye & Jiang, Bo & Kong, Xue, 2020. "Optimal way to achieve renewable portfolio standard policy goals from the electricity generation, transmission, and trading perspectives in southern China," Energy Policy, Elsevier, vol. 139(C).
    5. Xin-gang, Zhao & Ling-zhi, Ren & Yu-zhuo, Zhang & Guan, Wan, 2018. "Evolutionary game analysis on the behavior strategies of power producers in renewable portfolio standard," Energy, Elsevier, vol. 162(C), pages 505-516.
    6. Kim, Hansung & Lee, Hwarang & Koo, Yoonmo & Choi, Dong Gu, 2020. "Comparative analysis of iterative approaches for incorporating learning-by-doing into the energy system models," Energy, Elsevier, vol. 197(C).
    7. Zhu, Chaoping & Fan, Ruguo & Lin, Jinchai, 2020. "The impact of renewable portfolio standard on retail electricity market: A system dynamics model of tripartite evolutionary game," Energy Policy, Elsevier, vol. 136(C).
    8. Kouhgardi, Esmaeil & Zendehboudi, Sohrab & Mohammadzadeh, Omid & Lohi, Ali & Chatzis, Ioannis, 2023. "Current status and future prospects of biofuel production from brown algae in North America: Progress and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).
    9. Kim, Sehyun & Lee, Hyunjae & Kim, Heejin & Jang, Dong-Hwan & Kim, Hyun-Jin & Hur, Jin & Cho, Yoon-Sung & Hur, Kyeon, 2018. "Improvement in policy and proactive interconnection procedure for renewable energy expansion in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 150-162.
    10. Xu, Jie & Lv, Tao & Hou, Xiaoran & Deng, Xu & Liu, Feng, 2021. "Provincial allocation of renewable portfolio standard in China based on efficiency and fairness principles," Renewable Energy, Elsevier, vol. 179(C), pages 1233-1245.
    11. Dongmin Son & Joonrak Kim & Bongju Jeong, 2019. "Optimal Operational Strategy for Power Producers in Korea Considering Renewable Portfolio Standards and Emissions Trading Schemes," Energies, MDPI, vol. 12(9), pages 1-24, May.

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