An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach
In the era of energy transition, climate and topography characteristics make wind energy a promising renewable energy source in South Korea. Following the successful operations of onshore wind power generation, the South Korean government has implemented the 3020 renewable energy implementation plan...
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| Format: | Article |
| Language: | English |
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Elsevier
2023-11-01
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| Series: | Energy Reports |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2352484723010284 |
| _version_ | 1797378670353973248 |
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| author | Jaehun Sim |
| author_facet | Jaehun Sim |
| author_sort | Jaehun Sim |
| collection | DOAJ |
| description | In the era of energy transition, climate and topography characteristics make wind energy a promising renewable energy source in South Korea. Following the successful operations of onshore wind power generation, the South Korean government has implemented the 3020 renewable energy implementation plan with a target of establishing 12GW offshore wind farms by 2030. Considering financial and time constraints, it is important to determine the most suitable locations to enable renewable energy farms to achieve the proposed targets for renewable energy production. Although several studies conducted in South Korea have assessed the economic feasibility of potential wind farm sites using the discounted cash-flow method, this method involves some limitations regarding incorporating the value of flexibility and uncertainty factors in the site evaluation process. Thus, this study utilized a real options approach – the Geske compound option model – in a system dynamics framework to evaluate potential sites for offshore wind farms on the mid-west coast of South Korea. Using the developed potential site evaluation model, this study obtained different results from the reference study, which conducted cost-benefit analyses of the same areas. The results of this study demonstrate the importance of flexibility value and uncertainty factors in the site evaluation process. This study also estimates the environmental mitigation of each potential site concerning carbon emission reduction for offshore wind farms. |
| first_indexed | 2024-03-08T20:11:01Z |
| format | Article |
| id | doaj.art-493ee103fd0b4d78b800416a53f0622f |
| institution | Directory Open Access Journal |
| issn | 2352-4847 |
| language | English |
| last_indexed | 2024-03-08T20:11:01Z |
| publishDate | 2023-11-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Energy Reports |
| spelling | doaj.art-493ee103fd0b4d78b800416a53f0622f2023-12-23T05:20:59ZengElsevierEnergy Reports2352-48472023-11-01102937An economic evaluation of potential offshore wind farm sites in South Korea using a real options approachJaehun Sim0Correspondence to: Changwon National University, Industrial and Systems Engineering, 20 Changwondaehak-ro, Euichang-gu, Changwon, 51140, Republic of Korea.; Department of Industrial and Systems Engineering, Changwon National University, Changwon, Republic of KoreaIn the era of energy transition, climate and topography characteristics make wind energy a promising renewable energy source in South Korea. Following the successful operations of onshore wind power generation, the South Korean government has implemented the 3020 renewable energy implementation plan with a target of establishing 12GW offshore wind farms by 2030. Considering financial and time constraints, it is important to determine the most suitable locations to enable renewable energy farms to achieve the proposed targets for renewable energy production. Although several studies conducted in South Korea have assessed the economic feasibility of potential wind farm sites using the discounted cash-flow method, this method involves some limitations regarding incorporating the value of flexibility and uncertainty factors in the site evaluation process. Thus, this study utilized a real options approach – the Geske compound option model – in a system dynamics framework to evaluate potential sites for offshore wind farms on the mid-west coast of South Korea. Using the developed potential site evaluation model, this study obtained different results from the reference study, which conducted cost-benefit analyses of the same areas. The results of this study demonstrate the importance of flexibility value and uncertainty factors in the site evaluation process. This study also estimates the environmental mitigation of each potential site concerning carbon emission reduction for offshore wind farms.http://www.sciencedirect.com/science/article/pii/S2352484723010284Economic evaluationOffshore wind farmReal optionSite selectionSystem dynamics |
| spellingShingle | Jaehun Sim An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach Energy Reports Economic evaluation Offshore wind farm Real option Site selection System dynamics |
| title | An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach |
| title_full | An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach |
| title_fullStr | An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach |
| title_full_unstemmed | An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach |
| title_short | An economic evaluation of potential offshore wind farm sites in South Korea using a real options approach |
| title_sort | economic evaluation of potential offshore wind farm sites in south korea using a real options approach |
| topic | Economic evaluation Offshore wind farm Real option Site selection System dynamics |
| url | http://www.sciencedirect.com/science/article/pii/S2352484723010284 |
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