Economic Feasibility and Strategic Planning for Floating Solar Power Plants in Korea: A Real Options Approach

This paper presents an economic feasibility analysis for constructing a 100 MW floating solar power plant in Korea aimed at utilizing idle water spaces to mitigate geographical limitations for large-scale renewable energy projects. Employing both Discounted Cash Flow (DCF) analysis and Real Options Analysis (ROA), the study evaluates the economic viability and strategic flexibility of the project under future market uncertainties. The DCF method reveals an NPV of 11,863,000 USD and a B/C ratio of 1.1, indicating baseline feasibility. However, the ROA demonstrates the value of adaptive strategies, with real option values showing that plant expansion (to 200 MW) is economically advantageous under favorable conditions. This approach supports strategic decision-making aligned with Korea’s renewable energy targets. The study emphasizes the importance of incorporating market uncertainties into feasibility assessments and proposes detailed strategies for expanding renewable energy generation.