The Policy Impact of Renewable Energy Subsidies on Solar PV: The Case of Renewable Portfolio Standard in Korea

Tae-Hyeong Kwon

doi:10.7836/kses.2017.37.1.059

All Issue

2017 Vol.37, Issue 1 Preview Page Next Page

Research Article

The Policy Impact of Renewable Energy Subsidies on Solar PV: The Case of Renewable Portfolio Standard in Korea 국내 태양광 발전 보조금 제도의 정책 효과: 공급의무화제도 사례를 중심으로

28 February 2017. pp. 59-69

PDF XML

Abstract

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.

Keywords

Solar PV

Feed-in tariff

Renewable portfolio standard

키워드

태양광발전

발전차액지원제도

공급의무화제도

References

Electimes, 2016. 7. 25.

Menanteau, P., Finon, D., and Lamy, M., Prices Versus Quantities: Choosing Policies for Promoting the Development of Renewable Energy, Energy Policy, Vol. 31, pp. 799-812, 2003.

Haas, R., Panzer, C., Resch, G., Ragwitz, M., Reece, G., and Held A., A Historical Review of Promotion Strategies for Electricity from Renewable Energy Sources in EU Countries, Renewable and Sustainable Energy Reviews, Vol. 15, pp. 1003-1034, 2011.

Kwon, T. H., Market Support Policies of Renewable Energy and Rent-seeking: The Case of Feed-in Tariffs and Renewable Portfolio Standard in Korea, Korean Journal of Public Administration, Vol. 53, No. 2, pp. 295-314, 2015.

Kim, J. H. and Lee, E. J., A Study on the Present State of Duty Performance According to the RPS System and Improvement Plan, Journal of the Korean Solar Energy Society, Vol. 33, No. 6, pp. 98-104, 2013.

Jin, S. H., Response Strategies of Seoul for the Introduction of Renewable Portfolio Standard, Seoul Development Institution, Seoul, 2009.

Lee, S. C. and Park, S. Y., Renewable Electricity Promotion Policy in Korea: Feature and Challenges through the Comparative Analysis of EU and Japanese policy, Journal of Environmental Policy, Vol. 7, No. 4, pp. 1-37, 2008.

Lee, C. H., Cho, J. H., and Yoon, J. H., LCOE and Potentials of Renewable Energy in Korea, Korea Environment Institute, Seoul, 2014.

Kwon, T., Rent and Rent-seeking in Renewable Energy Support Policies: Feed-in Tariff vs. Renewable Portfolio Standard, Renewable and Sustainable Energy Reviews, Vol. 44, pp. 676-681, 2015.

Sonu, S. H., Effect of the REC Price Volatility on the PV System Installation by Private Participants: Empirical Test on a Korea Case under the RPS System, New and Renewable Energy, Vol. 12, No. 3, pp. 156-164, 2016.

Choi, J. H. and Lee T. S. Impact of Renewable Portfolio Standard System on the Feasibility of LNG Combined-cycle Power Projects Based on Project Finance, Vol. 11, No. 1, pp. 27-35, 2015.

Renewable Energy Policy Network for the 21st Century (http://www.ren21. net/).

Information

Publisher :Korean Solar Energy Society
Publisher(Ko) :한국태양에너지학회
Journal Title :Journal of the Korean Solar Energy Society
Journal Title(Ko) :한국태양에너지학회 논문집
Volume : 37
No :1
Pages :59-69
Received Date : 2016-12-09
Revised Date : 2017-02-20
Accepted Date : 2017-02-21
DOI :https://doi.org/10.7836/kses.2017.37.1.059

Journal of the Korean Solar Energy Society ISSN:1598-6411(Print) 2508-3562(Online) 한국태양에너지학회 논문집

All Issue