(The) utility of solar PV supply in Southeast Asia : carbon offset impacts on Korea GHG reduction

다국어 초록 (Multilingual Abstract)

Abstract
In 2015, the Paris Agreement came into effect, and countries announced Nationally Determined Contributions (NDC), a voluntary greenhouse gas reduction target. According to its established NDC, Korea plans to reduce its greenhouse gas(GHG) emissions by 37% from the business-as-usual (BAU, 850.6 MCO2eq) level by 2030 across all economic sectors. Of the 37%, 32.5% is targeted for domestic reduction, and 4.5% is for forestry and international market mechanism. Although these reductions are global trends, the burden on the industry is large. Therefore, overseas carbon offset project is attracting attention through international cooperation.
This study was carried out to find the most promising solar photovoltaic(PV) business in 8 countries among the 10 Southeast Asian countries by developing ‘Solar PV supply decision index in Southeast Asia’. As a result, Thailand and Indonesia were expected to be the most promising for the supply of photovoltaic power
Economic feasibility analysis of solar PV supply in these countries was conducted. Net present value(NPV) and internal rate of return(IRR) analyzes were used for economic feasibility analysis. The initial investment cost is taken into account in the cost, and the electricity sales revenue through the Feed-in-Tariff(FiT) and the carbon credits transaction profit was taken into account in the revenue. The sensitivity analysis of initial investment cost and discount rate was also conducted. NPV and IRR analysis showed that Thailand was economical in all cases and Indonesia was economical in every case except FiT subsidy of 6.5 USD cents / kW. In the case of sensitivity, the increase and decrease in the initial investment cost led to the same level of NPV increase and decrease. In case of discount rate, 3% increase in NPV in all cases compared with 4.5%. However, in the case of 7%, it is uneconomical when FiT subsidy is 13 USD cent / kW in Thailand, 6.5 USD cent / kW and 9 USD cents / kW in Indonesia.
Based on the economic feasibility analysis, this study looked at the contribution of carbon offset on Korea to the GHG reduction target through as a solar PV supply. Assuming that 1 GW solar power plant is constructed in Indonesia and Thailand, the first year's power generation converted to carbon dioxide is about 599,469 ~ 700,025 tCO2, and this is 4 ~ 4.7% of total trading volume of Korea Emission Trading Scheme(K-ETS) in 2017. In addition, when the credit is traded through the overseas carbon market, it can be recognized as an overseas reduction, which is 3.7 ~ 4.3% of the revised overseas reduction target of 16.2 MtCO2. According to Industry News, Korean companies' overseas PV export volume will reach 1.2 ~ 1.5GW in 2018, and if this trend is maintained, Korea will be able to reach its overseas target of 16.2 MtCO2, in 15.4 ~ 22.5 years through solar PV supply.

목차 (Table of Contents)

• Table of contents
• 1. Introduction.......................................................................................................1
• 1.1 Background and purpose of the research.........................................1
• 1.2 Subjects and methods of research ...................................................3
• 1.3 Literature Review............................................................................4.
• 2. Southeast Asia’s Renewable Energy Status and Policy...................................8
• 2.1 Southeast Asian Country's Plan of Renewable Energy Supply......8
• 2.2 NDC Analysis Southeast Asian Countries...................................15
• 3. Korea’s NDC and Renewable Energy Policy ................................................16
• 3.1 Korea’s NDC...............................................................................16
• 3.2 Korea’s renewable energy policy – focusing on solar PV...........19
• 4. Analysis of solar PV Supply in Southeast Asia...............................................21
• 4.1 Establishment of solar PV supply decision index in Southeast Asia…........................................................................................21
• 4.2 Analysis structure........................................................................24
• 4.3 Analysis result.............................................................................34
• 5. Economic Feasibility Analysis.........................................................................34
• 5.1 Solar PV market environment in Thailand and Indonesia...........34
• 5.2 NPV, IRR Analysis.......................................................................44
• 5.3 Sensitivity analysis......................................................................57
• 6. Conclusion – Carbon Offset Impact on Korean GHG Reduction.......................60
• Bibliography.........................................................................................................67
• Appendix ..............................................................................................................72