An Economical Analysis on Fuel Switching Model of Coal Power Plant using Herbaceous Biomass

초본계 바이오매스 활용 석탄발전소 연료전환 모형 경제성분석 연구

Abstract

The project to utilize kenaf as thermal power plant fuel has a positive effect on the unused energy utilization, greenhouse gas reduction, and farm income. However, it is analyzed that it is difficult to secure economical efficiency because the fuel cost of kenaf is higher than that of power by thermal power plant and Renewable Energy Certification (REC). The project of power generation using kenaf is meet the government's major policies, while government support is essential for securing economical efficiency. As a result of the sensitivity analysis on the ratio of the government subsidies, to secure economical efficiency, the power generation prices using kenaf through the direct financial support of the government indicate that 47% and 76% of kenaf fuel cost are supported by government in case of the Saemangeum reclamation and Gangneung-si, respectively. In the case of the government indirect policy support, if kenaf is included as a renewable energy source of Renewable Energy Portfolio Standard and REC is granted, the economic efficiency of Saemangeum reclamation and Gangneung-si is obtained when REC secured at 1.05 or more and 2.43 or more, respectively. The results of this study are meaningful in that the direct and indirect effects of the government on the development of the herbaceous energy crop, kenaf, were evaluated economically. These results are to suggest the need for demonstration study, but economics analyze and evaluate are necessary based on operational data through the demonstration phase in the future.

Fig. 1 Project economics evaluation procedure

Fig. 2 Sensitivity analysis result about business in accordance with government subsidy increase by herbaceous biomass fuel price

Fig. 3 Government subsidy by rate of government subsidy scenario

Fig. 4 Sensitivity analysis result about business in accordance with REC increase

Table 1 Economics log determination coefficient on production cost and scale by rice cultivation scale

Table 2 Gangneun-si rice farmers imports in 2016 (RDA, 2017)

Table 3 Renewable Energy Certificate (REC) Weight by new and renewable energy source in Korea (Korea Energy Agency, 2019)

Table 4 Business structure and analysis alternative summary

Table 5 Investment Cost of electricity for Biomass (IEA, 2015)

Table 6 Korea South-East Power Coal-Fired Power Generator Utilization Rate in 2017 (KEPCO, 2018)

Table 7 Initial investment cost of power plant using herbaceous biomass

Table 8 Kenaf production capacity in Saemangeum reclamation (100ha)

Table 9 Kenaf production capacity in Gangneung-si

Table 10 Fuel cost of kenaf

Table 11 Subsidy of landscape conservation and fixed farm of kenaf

Table 12 Plan of worker in power plant

Table 13 REC sales price

Table 14 Economics analysis standard

Table 15 Government subsidy ratio and REC weight matrix analysis (Saemangeum reclamation)

Table 16 Government grants subsidy and REC weight matrix analysis (Gangneung-si)