Public perspective on co-firing hydrogen with natural gas in power plants in South Korea

Abstract

The South Korean government plans to gradually change existing power generation from natural gas (NG) to hydrogen co-fired with NG to help abate emissions of greenhouse gases (GHGs). This research aims to explore people's additional willingness to pay (AWTP) for consuming one kWh of electricity generated from a mixture of 35% hydrogen and 65% NG compared to electricity generated from 100% NG. Contingent valuation (CV) was applied to obtain data on the AWTP. A CV survey of 1000 randomly chosen people was conducted to obtain data, a one-and-one-half-bounded model was adopted to elicit the AWTP from interviewees, and a spike model was used to analyze the AWTP observations with zeros. The average AWTP was obtained as KRW 24.3 (USD 0.022) per kWh. Since the electricity price was KRW 107.9 (USD 0.096) per kWh, the value that people place on co-firing, which means the sum of the price and the AWTP, was KRW 132.2 (USD 0.118) per kWh. Because the total cost of the power supply for hydrogen co-fired with NG is KRW 145.7 (USD 0.130) per kWh, a subsidy of at least KRW 13.5 (USD 0.012) per kWh must be provided to encourage co-firing to mitigate GHG emissions.