The Economic Viability of Renewable Portfolio Standard Support for Offshore Wind Farm Projects in Korea

Offshore wind farm (WF) projects have been promoted by support schemes as part of the expansion of renewable energy resources in Korea. This paper examines in detail how the Renewable Portfolio Standard (RPS), which was adopted post the Feed-in-Tariff scheme in 2012, has had a profound impact on the economic benefits of offshore WFs in Korea. A framework for analyzing the economic viability of RPS is presented and applied to the sixth basic plan for long-term electricity supply and demand in Korea. The electricity market price is forecast using a reformulated probabilistic production cost (PPC) model, and the renewable energy certificate (REC) price is calculated using its determination rule. The results show that the existing RPS will be ineffective in increasing the penetration of offshore WFs in Korea; however, they also indicate that the economic viability of offshore WFs could be improved by adjusting the existing RPS.