• Environmental and Resource Economics Review
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• v.23 no.3
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• pp.515-551
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• 2014

Recently, there has been a debate as to whether bioethanol should replace some portion of gasoline for fuels in South Korea, as energy security as well as climate change issues are rising as a significant national agenda. However, a considerable amount of subsidy will be required to compensate for the higher price of bioethanol-blended gasoline. In this context, government subsidy will obtain justification only when the positive social gains from consuming bioethanol for fuels can exceed the negative social costs. Through a nation-wide choice experimental survey, we examine if South Koreans have a positive value as well as non-linear preferences on substituting bioethanol for gasoline. The results reveal that the willingness to pay for purely domestic bioethanol-blended gasoline within 10% is about 52 KRW; Koreans have concave preferences on the blending ratio of bioethanol to gasoline. The turning point of the blending ratio of bioethanol was 6.5%. Also, we found inverse U-shaped curve between income and bioethanol choice probability and the turning point of the income was calculated as 250~299million KRW. Politically conservative propensity advocates uses of bioethanol blended gasoline, but awareness on bioethanol or more weights on environmental conservation have significantly negative effects on the choice of bioethanol. However, the design of the survey questionnaire is incompatible with the RFS of Korea and assumes orthogonality among the following four interrelated attributes: (i) domestic or offshore procurement of feedstocks in the case of domestic production, (ii) domestic production or import of bioethanol, (iii) the blending ratios, and (iv) the retail price increases. In addition, the results of model estimation and of model selection test are not definite. Hence, the results in this study should not be directly applied to the design of the specifics of the Korean RFS. Hence, the results in this study require cautions in applying to the design of the Korean RFS policy.

• Environmental and Resource Economics Review
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• v.31 no.4
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• pp.645-668
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• 2022

Hydrogen energy is emerging as an important means of carbon neutrality in the various sectors including power, transportation, storage, and industrial processes. Fuel cell power plants are the fastest spreading in the hydrogen ecosystem and are one of the key power sources among means of implementing carbon neutrality in 2050. However, high volatility in system marginal price (SMP) and renewable energy certificate (REC) prices, which affect the profits of fuel cell power plants, delay the investment timing and deployment. This study applied the real option methodology to analyze how the dual uncertainties in both SMP and REC prices affect the investment trigger price level in the irreversible investment decision of fuel cell power plants. The analysis is summarized into the following three. First, under the current Renewable Portfolio Standard (RPS), dual price uncertainties passed on to plant owners has significantly increased the investment trigger price relative to one under the deterministic price case. Second, reducing the volatility of REC price by half of the current level caused a significant drop in investment trigger prices and its investment trigger price is similar to one caused by offering one additional REC multiplier. Third, investment trigger price based on gray hydrogen and green hydrogen were analyzed along with the existing byproduct hydrogen-based fuel cells, and in the case of gray hydrogen, economic feasibility were narrowed significantly with green hydrogen when carbon costs were applied. The results of this study suggest that the current RPS system works as an obstacle to the deployment of fuel cell power plants, and policy that provides more stable revenue to plants is needed to build a more cost-effective and stable hydrogen ecosystem.

• Plant Journal
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• v.12 no.3
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• pp.39-45
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• 2016

Each of fuel consumption per hour was measured at the 320 MW and 380 MW generator output while changing mixing ratio of bio fuel oil to 50%, 80% and 100%. Fuel consumption per hour was increased from 11.0% to 20.4% as mixing ratio of bio fuel oil was changed from 50% to 100% at the 320 MW generator output comparing with fuel consumption per hour in case of bunker-C oil single firing. Fuel consumption per hour was also increased from 12.0% to 21.1% as mixing ratio of bio fuel oil was changed from 50% to 100% at the generator output 380 MW. Furthermore, it was confirmed that plant efficiency was decreased as mixing ratio of bio fuel oil was increased from 50% to 100% as a result that plant efficiency was calculated using the measured fuel consumption per hour, the generator output and the gross heating value.