An analysis on the effectiveness of a smart grid test-bed project: The Korean case

This study analyzes the effectiveness of Korea׳s Smart Grid project using Difference-in-Difference (DID) estimation, which utilizes both 2013 survey data on the participating households of the Jeju Smart Grid Test-bed and the actual electricity use of households during 2009–2012. The findings are as follows. First, the Smart Grid project effectively causes a reduction in electricity use. Second, households which have the following characteristics tend to use more electricity: male householder, many family members, income. Third, households which have better understanding about the Smart Grid use less electricity. Based on these findings, we can derive the following policy implications. First, it is necessary to set up a policy which accelerates active participation of both consumers and producers of related equipment in order to promote the Smart Grid. Second, a reform of the electricity pricing system is needed to enhance the effectiveness of the Smart Grid project. Third, publicity activities of the Smart Grid project should be strengthened for wider recognition.