PV and onshore wind technologies have lower grid parity points
with the incorporation of the national plan (MOTIE, 2013) than
those without the incorporation of the plan, because the capacities
of the existing and newly planned conventional technologies according
to the plan are expected to be sufficient to supply electricity
until 2027. Moreover, both technologies require a dramatic
reduction in the LCOEs for active deployment. When the Korean
Government established the national plan, the Republic of Korea
had been suffering from serious electricity shortages and the
average annual growth rate of the electricity demand was projected
to be 3.4% CAGR from 2013 to 2027. As a result, the Government
set a plan for increasing the reserve rate from about 9.8%
in 2012 to about 22% in 2027. However, due to the economic
slowdown, the expected average annual growth rate of the electricity
demand was adjusted to 2.1% CAGR in the recent plan
(MOTIE, 2014), so the Korean electric power system will have
overcapacities of conventional technologies relative to the demand
in the near future and there will be no room for the renewable
energy technologies. Therefore, a policy or plan for the deployment
of renewable energy technologies must be harmonized with
other policies and plans within the same energy system.
In summary, from the results of the case study, we have shown
that the grid parity point in an electric power system can vary according
to the renewable energy technology, the time of introduction,
and the circumstance of the system, and we have emphasized
the necessity for thoughtful analysis of grid parity. We have shown
that thoughtful analysis based on an energy system model can provide
more realistic and meaningful results, and we believe that the
results can help policy makers and stakeholders to make more informed
and better decisions. Despite its advantages, only a few global
agencies, such as the IEA and the IRENA, and countries such as the
United States, Germany, and the Netherlands, have actively utilized
this kind of analysis in the establishment process of renewable energy-related
policies or business strategies because the analysis
based on an energy system model requires a large amount of data as
well as, more importantly, professional skills and knowledge. In this
context, the other contribution of this study is the sharing of
knowledge about the utilization of an energy system model.