THE IMPACT OF LARGE-SCALE RENEWABLE ENERGY INFRASTRUCTURE INVESTMENT
Korea's renewable energy policy has been facing considerable uncertainty due to
unexpected regime change. In the absence of the official announcement of the new
government's renewable energy policy, a variety of informal initiatives are being
discussed. This study analyzes economic impact of large-scale renewable energy
infrastructure investment with different scenarios using input-output analysis.
The analysis is based on the 2014 input-output table issued by the Bank of Korea
and methods are as follows. First, three different investment scenarios that are most
relevant to the current state of the Republic of Korea are set up. Second, the capital
investment stimulus of renewable energy infrastructure investment is estimated for each
scenario through Leontief’s demand-driven model. Third, economy structure in new grid
mix on each industry after the investment of each scenario is completed is estimated. This
study reorganizes the industrial classification into 35 sectors by reclassifying the renewable
energy industry.
The impacts of each scenario are evaluated by comparing the production-inducing
effect to other industries, value added inducing effect and employment-inducing effect. As
results, first, solar power generation is the more attractive option even in the economic
sense in terms of initial capital investment as scenario 1 requires $118,634 million with
dollar value in 2015 whereas scenario 2 requires $126,739 million with dollar value in
2015. Second, in solar-focused scenario, ‘electronic and electrical equipment’ and
‘chemical products’ industries are the most benefited. Whereas in wind-focused scenario,
‘basic metal products’ industry is the biggest beneficiary. Third, in the economic structure
of 2030 after the installation of renewable energy facility, there can be a sacrifice in the
traditional energy industry, but it has an overall positive impact on the rest of the industry