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.
Highlights
The Korean government has recently announced an expansion plan for renewable energy resources that entails an increase of at least 20% in national installed generation capacity by 2027
The motivation of our study was to investigate whether the Renewable Portfolio Standard (RPS) currently in force is effective to promote the expansion plan which focuses on the penetration of offshore wind farm (WF) in Korea
We proposed a framework to assess the economic viability of RPS considering long-term changes in revenue elements
Summary
The Korean government has recently announced an expansion plan for renewable energy resources that entails an increase of at least 20% in national installed generation capacity by 2027. The area that will be occupied by the site is approximately 226 km and it is located 200 km from the center of Seoul This demonstrates the Korean government's intention to increase the penetration of renewable energy through the strategic promotion of the large-scale offshore WFs. Private investors in Korea may be reluctant to invest in offshore WF projects without the benefit of economic support schemes. The electricity market price is forecast using a reformulated probabilistic production cost (PPC) model [17] and the REC price is calculated using its determination rule [18] The results of these simulations provide insight into the economic viability of the RPS in Korea and a basis for adjusting the RPS considering potential changes in the circumstances related to renewable energy penetration.
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