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Compensation strategies for renewable energy curtailment in South Korea

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  • Noh, Jinah
  • Kim, Jip
  • Kim, Young-Jin
  • Lee, Kwang Y.
  • Beak, Seung-Mook
  • Park, Jung-Wook

Abstract

This study proposes the systematic compensation strategies for renewable energy curtailment in South Korea. South Korea has experienced curtailment owing to an increase in renewable energy. However, there is no systematic systems for curtailment compensation in South Korea, and the renewable energy producers bear all the losses. Although the country's goal is to expand renewable energy, the absence of compensation for curtailment deters investments in renewable energy. This study categorizes the causes of renewable energy curtailment in South Korea by reviewing domestic regulations and international experiences. Using the classified causes, it proposes a method for accurately identifying the causes of curtailment through variations in constraints when the unit commitment model is applied. This study also provides a strategy to compensate for the losses of each generator according to the compensation criteria. The proposed strategy and its effectiveness are evaluated through scenario-based simulations. The results demonstrate that the proposed compensation strategy provides an equilibrium of curtailment responsibility between grid operators and renewable energy producers. This study aims to contribute to the achievement of South Korea's national energy transition goals by providing a systematic framework to encourage continued investment in renewable energy, particularly during the transition to market-based operations.

Suggested Citation

  • Noh, Jinah & Kim, Jip & Kim, Young-Jin & Lee, Kwang Y. & Beak, Seung-Mook & Park, Jung-Wook, 2025. "Compensation strategies for renewable energy curtailment in South Korea," Energy Policy, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:enepol:v:199:y:2025:i:c:s0301421525000084
    DOI: 10.1016/j.enpol.2025.114501
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