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Will South Korean Residential Consumers Accept the Renewable Heat Incentive Scheme? A Stated Preference Approach

1
Research Strategy Department, Frontier Research and Training Institute, Korea District Heating Corporation, 92 Gigok-Ro, Giheung-Gu, Yongin, Gyeonggi 17099, Korea
2
Department of Energy Policy, Graduate School of Energy and Environment, Seoul National University of Science and Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
*
Author to whom correspondence should be addressed.
Energies 2019, 12(10), 1910; https://doi.org/10.3390/en12101910
Received: 1 April 2019 / Revised: 7 May 2019 / Accepted: 10 May 2019 / Published: 18 May 2019
(This article belongs to the Special Issue Energy Policy in South Korea)
In South Korea, renewable energy policy is mainly focused on electricity and tends to neglect renewable heat (RH). However, for the purpose of reducing greenhouse gas emissions, the heating sector must sharply switch from its use of conventional fuels to renewable sources. The South Korean Government is considering an RH incentive (RHI) program with financial and policy support schemes and is thus demanding information about residential consumers’ acceptance of the RHI program to expand the use of RH. Therefore, this study looked into residential consumers’ acceptance of the introduction of the RHI program by applying contingent valuation (CV). For this purpose, a CV survey of 600 interviewees was conducted using a dichotomous choice question format that asked a respondent if she/he is willing to pay a given amount. Furthermore, among the various dichotomous choice question formats, the one-and-one-half-bounded format, which is considered desirable in terms of efficiency as well as consistency, was applied. One point to note in analyzing the CV responses was that not a few interviewees had zero willingness to pay (WTP). Thus, a spike model was employed to deal with the dichotomous choice CV data with a number of zero observations. The results revealed that the household mean WTP amounted to KRW 5753 (USD 5.35) per year. If we look at this value from a national perspective, it is worth KRW 113.63 billion (USD 105.61 million) per year. This value corresponds to the economic value or benefits that the introduction of an RHI program provides to the South Korean people each year and needs to be compared to the costs that the introduction of RHI will incur. View Full-Text
Keywords: renewable energy; renewable heat incentive; residential consumer; contingent valuation; acceptability; willingness to pay renewable energy; renewable heat incentive; residential consumer; contingent valuation; acceptability; willingness to pay
MDPI and ACS Style

Lim, S.-Y.; Yoo, S.-H. Will South Korean Residential Consumers Accept the Renewable Heat Incentive Scheme? A Stated Preference Approach. Energies 2019, 12, 1910.

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