Is Zero Subsidy in Fixed-Bottom Offshore Wind Farms Feasible? The Case of Incheon, South Korea
Abstract
:1. Introduction
2. Strategy and Project Aim
2.1. Fixed-Bottom Wind Farm Site—Incheon
2.2. South Korea’s Renewable Energy Policies (Offshore Wind Energy)
2.2.1. Renewable Energy Portfolio Standard (RPS)
2.2.2. Renewable Energy Certificates (REC)
2.2.3. Renewable Energy 3020 Implementation Plan (RE3020)
2.2.4. The Third Energy Master Plan and the Ninth Basic Plan for Power Supply and Demand
2.2.5. The Korean New Deal
2.2.6. Fishing Industry Collaboration
3. Methods
4. Analysis and Results
4.1. LCoE for the Incheon Wind Project
4.2. Scenarios
5. Discussion
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
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At Heigh 100 m | Incheon | South Jeolla | North Jeolla | Ulsan | Jeju |
---|---|---|---|---|---|
Mean Wind Speed (m/s) | 6.98 | 7.77 | 6.79 | 7.81 | 7.51 |
Mean Power Density (W/m2) | 439 | 538 | 469 | 722 | 525 |
Water depth at site (m) | 25 | 55 | - | 140 | 105 |
Type of Offshore Wind Farm | Fixed-bottom | Floating |
Category | Value | |
---|---|---|
Period | 2024–2053 | Year |
Capacity | 500 | MW |
Capital Expenditure (CAPEX) [32] | 3,837,000 | USD/MW |
Operating Expenses (OPEX) [32] | 51.92 | USD/MWh |
Net Capacity Factor [32] | 38.80 | % |
Tax Rate [33] | 22.00 | % |
Inflation [34] | 2.00 | % |
Discount Rate [35] | 6.00 | % |
Debt term [33] | 15 | Years |
Debt Fraction [33] | 70 | % |
Depreciation in Korea: Straight-line method [36] | 5 | %/year |
Category | Criteria | REC Weighting |
---|---|---|
Onshore | - | 1.2 |
Offshore | - | 2.5 |
Offshore | grid connection ≥ 5 km and water depth ≥ 5 m | +0.4 per 5 km and 5 m (Max. 3.5) |
Category | Value | |
---|---|---|
SMP | 80 | KRW/kWh |
REC | 30.2 | KRW/kWh |
REC Weight | 2.5 | |
SMP + 1 REC | 155.5 | KRW/kWh |
PPA = SMP + 1 REC in USD | 130.45 | USD/MWh |
PPA [USD/MWh] | NPV [KRW/kWh] | IRR [%] | |
---|---|---|---|
IF REC Weight = 1.0 | 92.45 | −207.22 | 9 |
IF REC Weight = 0.0 | 67.11 | −443.47 | 2 |
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Lee, J.; Xydis, G. Is Zero Subsidy in Fixed-Bottom Offshore Wind Farms Feasible? The Case of Incheon, South Korea. Wind 2022, 2, 210-220. https://doi.org/10.3390/wind2020012
Lee J, Xydis G. Is Zero Subsidy in Fixed-Bottom Offshore Wind Farms Feasible? The Case of Incheon, South Korea. Wind. 2022; 2(2):210-220. https://doi.org/10.3390/wind2020012
Chicago/Turabian StyleLee, Jongmin, and George Xydis. 2022. "Is Zero Subsidy in Fixed-Bottom Offshore Wind Farms Feasible? The Case of Incheon, South Korea" Wind 2, no. 2: 210-220. https://doi.org/10.3390/wind2020012