The public willingness to pay for the research and demonstration of tidal stream energy in South Korea

Abstract

South Korea has established a plan to install 700 MW of tidal stream energy (TSE) generation by 2030, and is pursuing the research and demonstration (R&D) of TSE. A significant amount of public funds will be invested in the R&D led by government-funded research institutes and public corporations. Thus, the government is seeking information about the aggregate willingness to pay (WTP) for the R&D. The purpose of this research is to explore the WTP by employing contingent valuation (CV). To this end, a CV survey of 1000 interviewees in South Korea was carried out using a closed-ended question during May 2020. Because 56.7% of all interviewees gave a zero WTP value, a spike model allowing for many zero values was adopted. The mean WTP was found to be KRW 4290 (USD 3.49) per annum per household and held statistical significance. This aggregate WTP for the R&D amounts to KRW 87.30 billion (USD 71.03 million) per year from a national perspective. The costs incurred by the R&D, which have not yet been accurately measured, can be compared to the aggregate WTP for the R&D. If the latter is greater than the former, the R&D may be socially profitable.