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Dynamic Economic Analysis of Subsidies for New and Renewable Energy in South Korea

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  • Gobong Choi

    (Department of Energy Systems Engineering, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea)

  • Eunnyeong Heo

    (Department of Energy Systems Engineering, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea)

  • Chul-Yong Lee

    (New and Renewable Energy Research Division, Korea Energy Economics Institute, 405-11 Jongga-ro, Jung-gu, Ulsan 44543, Korea)

Abstract

Many countries are increasing the supply of new and renewable energy to reduce greenhouse gas emissions and promote energy security. Subsidies for new and renewable energy are considered a useful means to increase supply, although a close assessment is needed of whether the subsidies improve the economic feasibility of new and renewable energy. Thus, this study conducted an economic analysis on South Korea’s housing support program for new and renewable energy sources from the perspectives of the government and consumers. The results showed that, in 2014, the use of solar photovoltaics (PV) led to constant improvements in economic feasibility, which benefited both the government and consumers, but fuel cell failed to do so from both perspectives. Solar thermal and geothermal heat showed improved economic feasibility throughout the program for consumers. In particular, solar PV reported high economic feasibility in 2014 and 2015 for consumers, indicating that a significant subsidy amount was provided for solar PV facilities. This also confirmed the possibility of achieving economic feasibility for other energy sources within a limited budget by distributing subsidies across the various sources.

Suggested Citation

  • Gobong Choi & Eunnyeong Heo & Chul-Yong Lee, 2018. "Dynamic Economic Analysis of Subsidies for New and Renewable Energy in South Korea," Sustainability, MDPI, vol. 10(6), pages 1-19, June.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:1832-:d:150183
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    References listed on IDEAS

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    3. Qüinny Soares Rocha & Rafaele Almeida Munis & Richardson Barbosa Gomes da Silva & Elí Wilfredo Zavaleta Aguilar & Danilo Simões, 2023. "Photovoltaic Solar Energy in Forest Nurseries: A Strategic Decision Based on Real Options Analysis," Sustainability, MDPI, vol. 15(5), pages 1-11, February.
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    5. Sinethemba Peter & Njabulo Kambule & Stephen Tangwe & Kowiyou Yessoufou, 2022. "Quantification of the Impact of Solar Water Heating and Influence of Its Potential Utilization through Strategic Campaign: Case Study in Dimbaza, South Africa," Energies, MDPI, vol. 15(21), pages 1-14, November.

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