• Korea Trade Review
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• v.43 no.4
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• pp.111-130
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• 2018

In December 2015, the Paris Agreement was adopted to cope with global warming caused by greenhouse gas emission and to prevent the average temperature of the Earth from rising. Renewable energy sources have become important to address environmental problems such as rising sea levels, depletion of forests and fine dust. In order to grow renewable energy, government support is needed. However, excessive government support for the renewable energy industry could pose problems that include undermining fair competition and raising costs. The WTO already has heard cases involving renewable energy subsidies. This article focuses on subsidies and countervailing tariffs as well as examines WTO disputes related to renewable subsidies, and also analyze legal issues that are problematic in granting subsidies for the development of new renewable energy industries. In WTO dispute involving renewable energy subsidies, legal issues are SCM Agreement article 2 Specificity, article 3 (b) import substitution subsidy and GATT article 20. This paper proposes improvement measures such as the reintroduction of article 8 Non-Actionable Subsidies or special provisions on energy subsidy. In addition, it is necessary to clarify the interpretation of Article 3 of the subsidy agreement. However, excessive government subsidies can lead to trade friction, so the WTO rules should be improved in line with the WTO goals of environmental protection, equity in free trade, and sustainable development.

• KDI Journal of Economic Policy
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• v.41 no.4
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• pp.67-99
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• 2019

This paper, focusing on the renewable portfolio standard (RPS), evaluates alternative renewable energy policies. We propose a tractable equilibrium model which provides a structural representation of Korea's electricity market, including its energy settlement system and renewable energy certificate (REC) transactions. Arbitrage conditions are used to define the core value of REC prices to identify relevant competitive equilibrium conditions. The model considers R&D investments and learning effects that may affect the development of renewable energy technologies. The model is parameterized to represent the baseline scenario under the currently scheduled RPS reinforcement for a 20% share of renewable generation, and then simulated for alternative scenarios. The result shows that the reinforcement of the RPS leads to higher welfare compared to weakening it as well as repealing it, though there remains room to enhance welfare. It turns out that subsidies are welfare-inferior to the RPS due to financial burdens and that reducing nuclear power generation from the baseline yields lower welfare by worsening environmental externalities.

• New & Renewable Energy
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• v.20 no.1
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• pp.52-60
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• 2024

This study conducted an economic analysis of renewable heat energy by estimating the levelized cost of heat production (LCOH) of ST and GSHP and comparing it with the cost of alternative fuels. The LCOH of ST ranged from 396.8 KRW/kWh to 578.7 KRW/kWh (small-scale), 270.3 KRW/kWh to 393.3 KRW/kWh (large-scale), and 156.3 KRW/kWh to 220.7 KRW/kWh for GSHP. The economic feasibility of ST and GSHP was analyzed by comparing the calculated LCOH and the fuel costs such as gas and kerosene prices. Moreover, scenario analyses were conducted for installation subsidies under the current system to examine the changes in the economics of renewable thermal energy.

• Journal of the Korean Solar Energy Society
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• v.37 no.1
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• pp.59-69
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• 2017

In 2012, Korea introduced a Renewable Portfolio Standard (RPS) scheme, replacing the Feed-in Tariff (FIT) scheme as a market support policy of renewable energy in the electricity market. RPS is to allocate obligatory quota of renewable energy sources for electricity suppliers, whereas FIT is to guarantee high prices for electricity from renewable energy sources. This study examines the effect of this policy change on solar photovoltaic market. According to the study, solar PV market grew fast under FIT as well as under RPS. However, under RPS the size of subsidy for solar PV suppliers was shrunk substantially. In addition, market risk increased severly under RPS due to the volatility of price of renewable energy certificate (REC) as well as of the electricity market price. The small and medium suppliers of solar PV were suffered the most severly from these policy effects. Therefore, the policy reform of RPS is needed to alleviate the market risk of small and medium suppliers of solar PV.

• The Transactions of The Korean Institute of Electrical Engineers
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• v.66 no.3
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• pp.486-492
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• 2017

In recent years, renewable energy sources have been mentioned as solution to environmental regulation and energy supply-demand. Energy storage systems are needed to mitigate the intermittent output characteristics of renewable energy sources and to operate micro grid efficiently using renewable energy generation systems. However, despite the necessity of energy storage system, this cannot secure the economical efficiency of the energy storage system by high initial cost. In this paper, a micro grid is constructed to supply electric power to industrial customers by using solar power generation system and energy storage system among renewable energy generation power sources and operated to improve energy independence. In the case study, we use photovoltaic system which is representative renewable energy generation system. Unlike conventional photovoltaic system, this system uses floating photovoltaic system with the advantage of having high output and no land area limitations. It is operated for the purpose of improving energy independence in the micro grid. In order to secure economical efficiency, the energy storage system operates a micro grid with a minimum capacity. Finally, this paper calculates the appropriate subsidy for the energy storage capacity.

• Journal of the Korean Solar Energy Society
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• v.34 no.5
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• pp.109-115
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• 2014

The supply rate of renewable energy has been increasing under the influence of an energy scarcity. Government has supported the use of renewable energy by government subsidies. The operation of renewable may not been operating appropriately, although increasing the use of renewable energy. We found out some problems of the operation of renewable energy and offered some improvements. This research proposes the efficient operation method for the solar thermal system, and proposed operation method was compared and evaluated with existing operation strategy after selecting one building installed solar thermal system. Recently, the interest to renewable energy has increased because of the environmental issues and energy crisis. However the utilization of the renewable energy system is low because of the use of renewable energy system and existing renewable energy system independently, although supply rate of renewable system is increasing. Especially, in the case of solar thermal system heating load is not responsible for the load of hot water supply in many cases. Therefore, suggesting efficient operation plans and evaluations of the energy consumption and efficiency of a solar thermal system is needed.

• 한국신재생에너지학회:학술대회논문집
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• 2010.11a
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• pp.137.1-137.1
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• 2010

For Indonesia, sustainable energy supply is an important factor to preserve the stable economic growth. One important strategy is development of renewable energy, which has not been fully exploited yet. The paper examines the potency of renewable energy in Indonesia. Currently, biomass composes 23% of total primary energy supply, while geothermal and hydropower has a combined share of 3%. But according to the overall potency of renewable energy, hydropower is found to have the highest available resource of 76 GW, followed by biomass and geothermal by 49.81 GW and 28.53 GW, respectively. Although the solar radiation is only at modest level ($4.80kWh/m^2/day$), the tropical all year sunlight can boost the competitiveness of solar photovoltaic and thermal application. As for wind energy, the average speed of 3-6 m/s requires the development of low speed wind turbine. The examination of electricity and petroleum product prices through international comparison for non-OECD countries shows fifth lowest price level for both of petroleum products and electricity for industrial use. As for household electricity price, Indonesia is placed the second among all the countries compared. The energy subsidy and price structure are examined in detail because it could be a source of hindrance to renewable energy promotion. The examination of renewable energy potency in this study could provide insights about recent development of renewable energy in Indonesia. As an outcome of policy examination, the price comparison analysis suggests Indonesia to reduce or even remove the energy subsidies in the long run. These findings can be utilized to formulate effective policies for renewable energy promotion.

• Journal of Korean Institute of Industrial Engineers
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• v.40 no.4
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• pp.358-365
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• 2014

The purpose of this paper is to analyze the efficiency of government investment in the deployment and technological development of three technological areas - wind power, photovoltaic and fuel cell - of renewable energy in Korea using the DEA (data envelopment analysis). The efficiencies of government investment in renewable energies are measured and compared among three kinds of technologies using the actual data during 2007~2009. In the present DEA model, R&D investment and government subsidies for renewable energy usage promotion are selected as input variables, and the number of patents, supply level, and the production cost as output variable. As a result, it is found that the wind power is the most efficient renewable energy in Korea in the perspective of the efficiency of government investment.

• KIEAE Journal
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• v.13 no.1
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• pp.17-28
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• 2013

Most governments have an interest in unused energy, because of high oil price and climate change. Particularly, it is very important to urban governments which have less renewable energy than other local governments. So Seoul, the capital of Korea, established a plan for the development of unused energy in 2007. But it has some problems related to the feasibility of this plan. So this paper checked and reviewed the economic feasibility of unused energy development cases in four cities by using three sub elements: technology, infrastructure, institution. As a result, it discovered that these urban governments have technological feasibility because they are located near big river or ocean. And they used the existing infrastructure and received the institutional subsidies from central governments in order to increase the economic feasibility of unused energy development projects. In conclusion, local governments of Korea have to try to seek how they can utilize the existing infrastructure for unused energy development in the situation that there are few institutional supports from the central government.

• Journal of Environmental Impact Assessment
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• v.24 no.4
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• pp.317-331
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• 2015

A major barrier to the spread and vitalization of renewable energy lies in its economic infeasibility. And yet, there is a disparity in estimating the economic feasibility between supply and demand sides. Taking this into account, we calculate an appropriate level of mini-solar panel subsidies provided by the Seoul metropolitan government. More pointedly, this research investigates the receptivity and social equity of the subsidy program based on the analysis of the program's financial feasibility. The results show that the subsidies can have anticipated effects for the heavy electricity consumption group but not for the low electricity consumption group. Specifically, estimated pay-back periods for groups of 401kWh ~ 500kWh (per month) users, 201 kWh ~ 400kWh users and 101kWh ~ 200kWh were approximately 5years, 8 ~ 9 years and 12 years, respectively. This implies that differential scales of the subsidies can better contribute to reducing regressive difference between the groups and meeting the goal of social equity in regards to energy justice.