Consumers’ heterogeneous preferences toward the renewable portfolio standard policy: An evaluation of Korea’s energy transition policy

Abstract

The low electricity tariff in Korea compared with other developed countries renders renewable energy expansion more challenging as its costs are higher than those of traditional power generation such as thermal and nuclear power. An increase in the electricity tariff is required to help the expansion of renewable energy and accelerate the energy transition. It is therefore necessary to understand public acceptance of the renewable portfolio standard (RPS) policies implemented by the Korean government to expand renewable energy. This study analyzes public’s heterogeneous preferences of renewable energy policies and identifies the determinants of people’s divided reactions to the policy. This study also forecasts the change in the degree of public acceptance of renewable energy expansion until 2030 and provides suggestions for the enhancement of public awareness and acceptance of the RPS plan. The simulation analysis shows that a sharp decline in the public’s acceptance rate is to be expected when the renewable energy expansion target becomes more challenging in 2025. The drastic change in acceptance is attributed to the electricity tariff spike. We conclude that the government should prepare to address the severe backlash from the public against the increase in electricity tariff to have a successful renewable energy policy.