Public Acceptance of the “Renewable Energy 3020 Plan”: Evidence from a Contingent Valuation Study in South Korea

South Korea is promoting the “Renewable Energy 3020 Plan” to expand the proportion of renewable energy (RE) from 2.2% in 2016 to 20% in 2030. Since the plan could lead to an increase in electricity rates, public acceptance of it is an important key to determining its success. This article examines the public acceptance of the plan by employing contingent valuation (CV). A nationwide CV survey of 1000 households was performed to collect the data on the willingness to pay (WTP) for implementing the plan using electricity charges as a payment vehicle during October 2018. More specifically, a dichotomous choice question to ask interviewees whether they have an intention of paying an offered bid and a spike model to treat the zero WTP observations were employed. The estimate for monthly WTP was KRW 3646 (USD 3.27) per household. When 10 years of the payment period presented in the survey and forecasted values of residential RE electricity consumption from 2018 to 2030 were used, the WTP was worth KRW 60.4 (USD 0.05) per kWh in 2018 constant price. The WTP amounts to 56.5% of the price for residential electricity (KRW 106.9 or USD 0.10 per kWh). That is, the RE electricity produced through implementing the plan has a premium of 56.5% over the current electricity. Overall, it is concluded that public acceptance of the plan has been secured.