Comparison of Greenhouse Gas Reduction Potential through Renewable Energy Transition in South Korea and Germany

The power generation sector is one of the largest sources of greenhouse gas emissions in South Korea. Reducing greenhouse gas emissions in this sector is therefore of crucial importance. The government has recently released its core energy policy objectives: elimination of coal-fired power generation, phase-out of nuclear plants, and promotion of renewable energy sources. This energy policy should be consistent with the national climate change response policy. This paper analyzed the optimum power generation structure based on the South Korean government’s energy policy and climate change policy and then analyzed the optimum power generation structure if the greenhouse gas reduction and renewable energy targets were different. Seven scenarios with different 2030 greenhouse gas reduction and renewable energy generation targets were investigated. The scenario analysis shows that it is difficult to reduce dependence on coal power generation if the South Korean government’s current energy and climate change policies are maintained. The current greenhouse gas reduction target level is insufficient to be a driving force for energy transition, but dependence on coal power generation can be reduced by applying a deeper level of greenhouse gas reduction (e.g. 50% reduction compared to BAU). To achieve the energy transition planned by the South Korean government, it would be necessary to set a target for greenhouse gas reduction that is deeper than the current plan. The results of this study analyzing the optimal power configuration for 2030 in light of South Korea’s energy and climate change policies are expected to contribute to the South Korean government’s establishment of policies in the future.

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Residential Consumers’ Willingness to Pay Price Premium for Renewable Heat in South Korea

Sustainability ◽

10.3390/su11051234 ◽

2019 ◽

Vol 11 (5) ◽

pp. 1234 ◽

Cited By ~ 3

Author(s):

Hee-Hoon Kim ◽

Seul-Ye Lim ◽

Seung-Hoon Yoo

Keyword(s):

Renewable Energy ◽

South Korea ◽

Willingness To Pay ◽

Greenhouse Gas Emissions ◽

Greenhouse Gas ◽

Fossil Fuels ◽

Price Premium ◽

Gas Emissions ◽

Residential Heating ◽

The Cost

Heat accounts for about one-third of the final energy use and it is mostly produced using fossil fuels in South Korea. Thus, heat production is an important source of greenhouse gas emissions. However, using renewable heat that is directly produced from renewable energy, such as bioenergy, geothermal, or solar heat can save energy and reduce greenhouse gas emissions, rather than transforming conventional fuel into heat. Therefore, an energy policy for renewable heat urgently needs to be established. It is such situations that this paper attempts to assess the consumers’ additional willingness to pay (WTP) or the price premium for renewable heat over heat that is produced from fossil fuels for residential heating. To that end, a nationwide contingent valuation survey of 1000 households was conducted during August 2018. Employing the model allowing for zero WTP values, the mean of the additional WTP or premium for one Gcal of heat produced using renewable energy rather than fossil fuels was estimated to be KRW 3636 (USD 3.2), which is statistically meaningful at the 1% level. This value represents the price premium for renewable heat over heat that is based on fossil fuels. Given that the heat price for residential heating was approximately KRW 73,000 (USD 65.1) per Gcal at the time of the survey, the additional WTP or the price premium corresponds to about 5% of that. When considering that the cost of producing renewable heat is still significantly higher than the cost of producing fossil fuels-based heat, more efforts to lower the production costs of renewable heat as well as financial support of the government for producing and supplying renewable heat are needed to ensure residential consumers’ acceptance of renewable heat.

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