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http://dx.doi.org/10.15266/KEREA.2019.28.1.147

Energy Transition Policy and Social Costs of Power Generation in South Korea  

Kim, Kwang In (Graduate College, Soongsil University)
Kim, Hyunsook (Department of Economics, Soongsil University)
Cho, In-Koo (Department of Economics, University of Illinois at Urbana-Champaign, Hanyang University)
Publication Information
Environmental and Resource Economics Review / v.28, no.1, 2019 , pp. 147-176 More about this Journal
Abstract
This paper uses research on the Levelized Cost of Electricity (LCOE) in South Korea to conduct a simulation analysis on the impact of nuclear power dependency and usage rates on the social costs of power generation. We compare the $7^{th}$ basic plan for long-term electricity supply and demand, which was designed to increase nuclear power generation, to the $8^{th}$ basic plan for long-term electricity supply and demand that decreased nuclear power generation and increased renewable energy generation in order to estimate changes in social costs and electricity rates according to the power generation mix. Our environmental generation mix simulation results indicate that social costs may increase by 22% within 10 years while direct generation cost and electricity rates based on generation and other production costs may increase by as much as 22% and 18%, respectively. Thus we confirm that the power generation mix from the $8^{th}$ basic plan for long-term electricity supply and demand compared to the $7^{th}$ plan increases social costs of generation, which include environmental external costs.
Keywords
Optimal fuel mix; Basic plan for long-term electricity supply-demand; Levelized cost of electricity; Social costs; Electricity rates;
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