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Research Monograph A Study on Local Acceptance of Renewable Energy Installations: Focusing on Externalities December 31, 2020

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Series No. 2020-04

Research Monograph KOR A Study on Local Acceptance of Renewable Energy Installations: Focusing on Externalities #Environment and Energy #General(Other, In-depth Evaluation) #Urban, Rural and Regional Economics
DOIhttps://doi.org/10.22740/kdi.rm.2020.04 P-ISBN979-11-5932-603-5 E-ISBN979-11-5932-609-7

December 31, 2020

  • 프로필
    KIM, Hyunseok
Summary
By providing externality estimates, and analyzing the determinants of the time period for renewable project preparation, this study aims to contribute to rationalizing measures for improving the local acceptance of renewable-energy power plants. To that end, the analysis is divided into three main parts. Chapter 2 reviews contemporary literature to identify the elements that form local acceptance and summarizes Korea’s key policies in relation to local acceptance before presenting two major empirical analyses. Chapter 3 quantitatively estimates the externality of renewable energy capacities―a source of many community-level complaints―in order to provide empirical findings for the rationalization of regulations and incentives. Chapter 4 empirically analyzes the causes of delays during a project preparation period, and verifies the impact of factors that form local acceptance, including the externalities. Based on the above analyses, Chapter 5 summarizes the results and draws on the policy implications.

Chapter 2 examines preceding studies and finds the main determinants of local acceptance of renewable energy capacities to be 1) the costs of negative externalities borne by individuals and; 2) fairness issues with respect to spatial proximity and fair procedures. This is followed by a review of major policies designed to improve local acceptance which are divided into three main types: i) site standards such as separation distance regulations implemented by local governments; ii) compensation strategies for local residents who are directly affected including support programs under the Act on Assistance to Electric Power Plants-neighboring Areas and the benefit-sharing schemes at individual power plant projects; and iii) project procedures such as locating planning systems that aim to guarantee fairness. Reviewing these policies, this chapter confirms that, in order to enhance the effectiveness of relevant measures designed to improve local acceptance, it needs to understand the factors that cause delays in project planning as well as on the negative externalities on areas near plants.

Chapter 3 attempts to estimate the scale of the externalities through the difference-in-differences method under the hedonic model after identifying negative externalities from solar and wind plants, respectively. In this analysis, the treatment effect on housing prices is defined as the effect of the ‘aggregate capacities within a 2km of each house at the time of its transaction.’ The unique housing transaction dataset, covering the period 2006-2019, is used, as well as the size and location of renewable plants in operation during the period. To minimize possible interference from other energy sources, the regional scope for the estimation was narrowed to area where each type of plants is concentrated: Jeollabuk-do, Jeollanam-do, and Gwangju-si for solar farms, and Gangwon-do, Gyeongsangbuk-do, and Ulsan-si for wind farms. Key analysis findings confirmed that both solar and wind capacities produced negative externalities in the vicinity. In addition, the effective radius and size of the externalities were found to vary from each other.

Chapter 4 outlines the typical process of large-scale renewable energy projects, including licensing/permits. As a new attempt, a survival analysis was carried out based on the information on the duration of the project preparation―the time period taken to start operations after being permitted. In doing so, explanatory variables reflecting the determinants of local acceptance are set where, in particular, based on the analysis results of Chapter 3, explanatory variables for the environmental impacts are included. The analysis utilized the data on project details and related regional characteristics of 390 solar and wind projects of which installed capacities are over 3MW and for which business permits are obtained during 2004-March 2020. According to the analysis higher capacities entail more delays, and this pattern can be observed in both solar and wind projects. In the case of large-scale solar energy projects (e.g., capacities exceeding 50MW), it was confirmed that the preparation period takes significantly longer when there are more housing within the 2-5km radius which has little relevance to direct externality.

The policy implications are summarized in Chapter 5. Factors that have a major impact on the local acceptance of renewable energy projects can be largely divided into i) ‘negative externalities that occur disproportionately according to proximity’ and ii) ‘fairness in procedures related to community participation,’ where the latter is associated with broader geographic proximity. To substantially improve local acceptance, a dual strategy can be useful. It entails government supports that compensate environmental effects for local residents who are directly exposed to the externalities, in collaboration with benefit-sharing schemes that induce participations of local residents with a wider geographical area. More specific policy suggestions are two-fold: i) support programs for neighboring areas under the Act on Assistance to Electric Power Plants-neighboring Areas need to provide concentrated assistance to a narrower scope of targets than the current 5km. In the case of the benefit-sharing approaches, participation should be facilitated by sharing necessary information on the revenue generation mechanism and by broadening the spatial scope eligible for participation.
Contents
발간사
요 약

제1장 서 론

제2장 수용성 결정요인과 지역 수용성 관련 주요 정책
 제1절 수용성 결정요인에 관한 선행연구
 제2절 지역 수용성 관련 주요 정책: 입지규제
 제3절 지역 수용성 관련 주요 정책: 보상전략
 제4절 지역 수용성 관련 주요 정책: 추진절차

제3장 재생에너지 발전시설 외부효과에 관한 분석
 제1절 재생에너지 발전시설 외부효과의 종류
 제2절 외부효과 추정 관련 주요 선행연구
 제3절 분석방법
 제4절 분석자료
 제5절 외부효과 추정 결과
 제6절 소결 및 함의

제4장 재생에너지 발전시설 사업준비기간에 관한 분석
 제1절 재생에너지 발전사업 추진절차
 제2절 발전사업 운영개시확률에 관한 선행연구
 제3절 분석방법
 제4절 분석자료
 제5절 사업준비기간 결정요인 분석 결과
 제6절 소결 및 함의

제5장 결론 및 정책적 시사점
 제1절 연구 결과의 요약
 제2절 정책적 시사점

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