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A Demand-Side Perspective on Developing a Future Electricity Generation Mix: Identifying Heterogeneity in Social Preferences

Author

Listed:
  • Sung-Yoon Huh

    (Haas School of Business, University of California Berkeley, 2220 Piedmont Avenue, Berkeley, CA 94720, USA)

  • Chul-Yong Lee

    (Korea Energy Economics Institute (KEEI), 405-11 Jongga-ro, Jung-gu, Ulsan 44543, Korea)

Abstract

Public support is an important factor in failure or success of the government decisions with respect to the electricity generation mix, which highlights the necessity of developing an electricity mix that reflects social preferences and acceptance. This study explores heterogeneity in social preferences for power sources and develops an electricity mix from a demand-side perspective. The study utilizes the choice-based conjoint survey and latent class model, and bases its empirical analysis on South Korea’s electric power sector. Results demonstrate that preferences for power sources in Korean society consist of two classes: one that is sensitive to the environment and one that is sensitive to risk. An electricity mix for Korea that reflects social preferences is 16.5–19.8% coal-fired, 13.3–24.9% liquefied natural gas (LNG), 9.0–11.2% oil, 22.3–32.9% nuclear, and 18.5–38.9% renewables, depending on the scenario. The study confirms that renewables are the power source with the least potential to cause social conflict, compared to nuclear and coal-fired sources. Moreover, increasing the proportion of renewables (currently only 3.9%) while decreasing the proportion of coal-fired power sources (currently 39.9%) to less than half its current level will result in an electricity mix that is accordance with social preferences in the long run.

Suggested Citation

  • Sung-Yoon Huh & Chul-Yong Lee, 2017. "A Demand-Side Perspective on Developing a Future Electricity Generation Mix: Identifying Heterogeneity in Social Preferences," Energies, MDPI, vol. 10(8), pages 1-19, August.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:8:p:1127-:d:106550
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    References listed on IDEAS

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    Cited by:

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    2. Dongnyok Shim & Seung Wan Kim & Jörn Altmann, 2018. "Strategic management of residential electric services in the competitive market: Demand-oriented perspective," Energy & Environment, , vol. 29(1), pages 49-66, February.
    3. JongRoul Woo & Sesil Lim & Yong-Gil Lee & Sung-Yoon Huh, 2018. "Financial Feasibility and Social Acceptance for Reducing Nuclear Power Plants: A Contingent Valuation Study," Sustainability, MDPI, vol. 10(11), pages 1-16, October.
    4. Qingchang Li & Seungkook Roh & Jin Won Lee, 2020. "Segmenting the South Korean Public According to Their Preferred Direction for Electricity Mix Reform," Sustainability, MDPI, vol. 12(21), pages 1-17, October.
    5. Kim, Hyo-Jin & Kim, Ju-Hee & Yoo, Seung-Hoon, 2019. "Social acceptance of offshore wind energy development in South Korea: Results from a choice experiment survey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.

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