• Journal of Energy Engineering
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• v.23 no.1
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• pp.46-57
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• 2014

This study analyzes whether the value-added structure of Korean wind power industry exhibits a virtuous cycle through the value chain(VC) within wind power firms and the value system(VS) among the wind power industries, using a regression analysis based on a survey about Korean wind power companies. According to the VC, the government's R&D support is analyzed to have contributed to an increase in the R&D investments of the wind power companies. An increase in corporates' R&D investments has led to an increase in corporates' R&D outputs, and in turn, induced a remarkable increase in the amounts of production. But an increase in production has not led to a decrease in the costs of production, not resulting in an increase in profit rates per sales amount. In addition, while an increase in profit rates is analyzed to have contributed to an increase in production, this did not induce further investments in corporate's R&D. The virtuous cycle of the value chain in Korean wind power firms is, therefore, analyzed to be weak. Next, the VS is analyzed by dividing the whole chain into the system group including rotor blades, gear boxes, and power generators, and the structure group, such as towers. Two groups are analyzed to have mutually positive effects in the processes of the government's support for corporates' R&D, corporates' investment in R&D, R&D outputs, and profit rates per sales amount. Such mutual positive effects are, however, not found in the processes of the amounts of production and the costs of production. These results demonstrates that the value system of Korean wind power industry is not completed. This study has a policy implication to need further efforts to create the virtuous cycle in the VC and VS of Korean wind power industry.