IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v8y2015i9p9731-9750d55444.html
   My bibliography  Save this article

The Economic Viability of Renewable Portfolio Standard Support for Offshore Wind Farm Projects in Korea

Author

Listed:
  • Chang-Gi Min

    (Department of Electrical and Computer Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-744, Korea)

  • Jong Keun Park

    (Department of Electrical and Computer Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-744, Korea)

  • Don Hur

    (Department of Electrical Engineering, Kwangwoon University, 20 Kwangwoon-ro 20, Nowon-gu, Seoul 139-701, Korea)

  • Mun-Kyeom Kim

    (Department of Energy System Engineering, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 156-756, Korea)

Abstract

Offshore wind farm (WF) projects have been promoted by support schemes as part of the expansion of renewable energy resources in Korea. This paper examines in detail how the Renewable Portfolio Standard (RPS), which was adopted post the Feed-in-Tariff scheme in 2012, has had a profound impact on the economic benefits of offshore WFs in Korea. A framework for analyzing the economic viability of RPS is presented and applied to the sixth basic plan for long-term electricity supply and demand in Korea. The electricity market price is forecast using a reformulated probabilistic production cost (PPC) model, and the renewable energy certificate (REC) price is calculated using its determination rule. The results show that the existing RPS will be ineffective in increasing the penetration of offshore WFs in Korea; however, they also indicate that the economic viability of offshore WFs could be improved by adjusting the existing RPS.

Suggested Citation

  • Chang-Gi Min & Jong Keun Park & Don Hur & Mun-Kyeom Kim, 2015. "The Economic Viability of Renewable Portfolio Standard Support for Offshore Wind Farm Projects in Korea," Energies, MDPI, vol. 8(9), pages 1-20, September.
    • Handle: RePEc:gam:jeners:v:8:y:2015:i:9:p:9731-9750:d:55444
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/8/9/9731/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/8/9/9731/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rahimiyan, Morteza, 2014. "A statistical cognitive model to assess impact of spatially correlated wind production on market behaviors," Applied Energy, Elsevier, vol. 122(C), pages 62-72.
    2. Rubin, Ofir D. & Babcock, Bruce A., 2013. "The impact of expansion of wind power capacity and pricing methods on the efficiency of deregulated electricity markets," Energy, Elsevier, vol. 59(C), pages 676-688.
    3. Lee, Sang-Min & Han, Hye-Sung, 2008. "Benefit-Cost Analysis of Biodiesel Production in Korea," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 31(5), pages 1-17, November.
    4. Sawhney, Rapinder & Thakur, Kaveri & Venkatesan, Bharadwaj & Ji, Shuguang & Upreti, Girish & Sanseverino, John, 2014. "Empirical analysis of the solar incentive policy for Tennessee solar value chain," Applied Energy, Elsevier, vol. 131(C), pages 368-376.
    5. Notton, G. & Lazarov, V. & Stoyanov, L., 2010. "Optimal sizing of a grid-connected PV system for various PV module technologies and inclinations, inverter efficiency characteristics and locations," Renewable Energy, Elsevier, vol. 35(2), pages 541-554.
    6. Menz, Fredric C. & Vachon, Stephan, 2006. "The effectiveness of different policy regimes for promoting wind power: Experiences from the states," Energy Policy, Elsevier, vol. 34(14), pages 1786-1796, September.
    7. Vilim, Michael & Botterud, Audun, 2014. "Wind power bidding in electricity markets with high wind penetration," Applied Energy, Elsevier, vol. 118(C), pages 141-155.
    8. Chen, Wei-Ming & Kim, Hana & Yamaguchi, Hideka, 2014. "Renewable energy in eastern Asia: Renewable energy policy review and comparative SWOT analysis for promoting renewable energy in Japan, South Korea, and Taiwan," Energy Policy, Elsevier, vol. 74(C), pages 319-329.
    9. Kim, Ji-Young & Oh, Ki-Yong & Kang, Keum-Seok & Lee, Jun-Shin, 2013. "Site selection of offshore wind farms around the Korean Peninsula through economic evaluation," Renewable Energy, Elsevier, vol. 54(C), pages 189-195.
    10. Wiser, Ryan & Barbose, Galen & Holt, Edward, 2011. "Supporting solar power in renewables portfolio standards: Experience from the United States," Energy Policy, Elsevier, vol. 39(7), pages 3894-3905, July.
    11. Cutler, Nicholas J. & Boerema, Nicholas D. & MacGill, Iain F. & Outhred, Hugh R., 2011. "High penetration wind generation impacts on spot prices in the Australian national electricity market," Energy Policy, Elsevier, vol. 39(10), pages 5939-5949, October.
    12. Lind, Arne & Rosenberg, Eva & Seljom, Pernille & Espegren, Kari & Fidje, Audun & Lindberg, Karen, 2013. "Analysis of the EU renewable energy directive by a techno-economic optimisation model," Energy Policy, Elsevier, vol. 60(C), pages 364-377.
    13. Skoplaki, E. & Palyvos, J.A., 2009. "Operating temperature of photovoltaic modules: A survey of pertinent correlations," Renewable Energy, Elsevier, vol. 34(1), pages 23-29.
    14. Pereira, Adelino J.C. & Saraiva, João Tomé, 2013. "Long term impact of wind power generation in the Iberian day-ahead electricity market price," Energy, Elsevier, vol. 55(C), pages 1159-1171.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibrahim Alotaibi & Mohammed A. Abido & Muhammad Khalid & Andrey V. Savkin, 2020. "A Comprehensive Review of Recent Advances in Smart Grids: A Sustainable Future with Renewable Energy Resources," Energies, MDPI, vol. 13(23), pages 1-41, November.
    2. Yang Tang & Yifeng Liu & Weiqiang Huo & Meng Chen & Shilong Ye & Lei Cheng, 2023. "Optimal Allocation Scheme of Renewable Energy Consumption Responsibility Weight under Renewable Portfolio Standards: An Integrated Evolutionary Game and Stochastic Optimization Approach," Energies, MDPI, vol. 16(7), pages 1-22, March.
    3. Sajid Ali & Sang-Moon Lee & Choon-Man Jang, 2017. "Techno-Economic Assessment of Wind Energy Potential at Three Locations in South Korea Using Long-Term Measured Wind Data," Energies, MDPI, vol. 10(9), pages 1-24, September.
    4. Thomas Poulsen & Charlotte Bay Hasager & Christian Munk Jensen, 2017. "The Role of Logistics in Practical Levelized Cost of Energy Reduction Implementation and Government Sponsored Cost Reduction Studies: Day and Night in Offshore Wind Operations and Maintenance Logistic," Energies, MDPI, vol. 10(4), pages 1-28, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rawat, Rahul & Kaushik, S.C. & Lamba, Ravita, 2016. "A review on modeling, design methodology and size optimization of photovoltaic based water pumping, standalone and grid connected system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1506-1519.
    2. Jed J. Cohen, Levan Elbakidze, and Randall Jackson, 2020. "Solar Bait: How U.S. States Attract Solar Investments from Large Corporations," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 167-190.
    3. kos Hamburger & G bor Harangoz, 2018. "Factors Affecting the Evolution of Renewable Electricity Generating Capacities: A Panel Data Analysis of European Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 161-172.
    4. Crago, Christine L. & Koegler, Eric, 2018. "Drivers of growth in commercial-scale solar PV capacity," Energy Policy, Elsevier, vol. 120(C), pages 481-491.
    5. del Río, Pablo & Bleda, Mercedes, 2012. "Comparing the innovation effects of support schemes for renewable electricity technologies: A function of innovation approach," Energy Policy, Elsevier, vol. 50(C), pages 272-282.
    6. Camps, Xavier & Velasco, Guillermo & de la Hoz, Jordi & Martín, Helena, 2015. "Contribution to the PV-to-inverter sizing ratio determination using a custom flexible experimental setup," Applied Energy, Elsevier, vol. 149(C), pages 35-45.
    7. del Río, Pablo & Tarancón, Miguel-Ángel, 2012. "Analysing the determinants of on-shore wind capacity additions in the EU: An econometric study," Applied Energy, Elsevier, vol. 95(C), pages 12-21.
    8. Suomalainen, Kiti & Pritchard, Geoffrey & Sharp, Basil & Yuan, Ziqi & Zakeri, Golbon, 2015. "Correlation analysis on wind and hydro resources with electricity demand and prices in New Zealand," Applied Energy, Elsevier, vol. 137(C), pages 445-462.
    9. Crago, Christine & Chernyakhovskiy, Ilya, 2014. "Solar PV Technology Adoption in the United States: An Empirical Investigation of State Policy Effectiveness," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169939, Agricultural and Applied Economics Association.
    10. Weron, Rafał, 2014. "Electricity price forecasting: A review of the state-of-the-art with a look into the future," International Journal of Forecasting, Elsevier, vol. 30(4), pages 1030-1081.
    11. González-Aparicio, I. & Zucker, A., 2015. "Impact of wind power uncertainty forecasting on the market integration of wind energy in Spain," Applied Energy, Elsevier, vol. 159(C), pages 334-349.
    12. Eric Bowen & Donald J. Lacombe, 2017. "Spatial Dependence in State Renewable Policy: Effects of Renewable Portfolio Standards on Renewable Generation within NERC Regions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    13. Sawhney, Rapinder & Thakur, Kaveri & Venkatesan, Bharadwaj & Ji, Shuguang & Upreti, Girish & Sanseverino, John, 2014. "Empirical analysis of the solar incentive policy for Tennessee solar value chain," Applied Energy, Elsevier, vol. 131(C), pages 368-376.
    14. Burkart, Christopher S. & Arguea, Nestor M., 2012. "Efficient scale for photovoltaic systems and Florida's solar rebate program," Energy Policy, Elsevier, vol. 48(C), pages 470-478.
    15. Sakah, Marriette & Diawuo, Felix Amankwah & Katzenbach, Rolf & Gyamfi, Samuel, 2017. "Towards a sustainable electrification in Ghana: A review of renewable energy deployment policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 544-557.
    16. Pantic, Lana S. & Pavlović, Tomislav M. & Milosavljević, Dragana D. & Radonjic, Ivana S. & Radovic, Miodrag K. & Sazhko, Galina, 2016. "The assessment of different models to predict solar module temperature, output power and efficiency for Nis, Serbia," Energy, Elsevier, vol. 109(C), pages 38-48.
    17. Guillaume Bourgeois & Sandrine Mathy & Philippe Menanteau, 2017. "The effect of climate policies on renewable energies : a review of econometric studies [L’effet des politiques climatiques sur les énergies renouvelables : une revue des études économétriques]," Post-Print hal-01585906, HAL.
    18. Wang, Tan & Gong, Yu & Jiang, Chuanwen, 2014. "A review on promoting share of renewable energy by green-trading mechanisms in power system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 923-929.
    19. Exizidis, Lazaros & Kazempour, S. Jalal & Pinson, Pierre & de Greve, Zacharie & Vallée, François, 2016. "Sharing wind power forecasts in electricity markets: A numerical analysis," Applied Energy, Elsevier, vol. 176(C), pages 65-73.
    20. Eric Bowen & Donald J. Lacombe, 2015. "Spatial interaction of Renewable Portfolio Standards and their effect on renewable generation within NERC regions," Working Papers 15-03, Department of Economics, West Virginia University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:8:y:2015:i:9:p:9731-9750:d:55444. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.