Integration cost of solar and wind power: a case study of Korea

The share of solar and wind power in Korea has been steadily increasing, and this trend is expected to continue. As solar and wind power increase, they displace the production of conventional power sources, leading to a reduction in generation costs. However, this also entails additional costs other than generation costs to cope with output variability and uncertainty due to weather conditions. It is therefore essential to calculate these additional costs, known as integration costs, in order to quantitatively assess the cost-saving effects of solar and wind power. However, research on estimating integration costs for solar and wind power in Korea has been very limited. Therefore, we calculated the integration costs of solar and wind power for 2030 and 2036 on a scenario basis using an integration cost estimation method studied at KU Leuven in 2016, taking into account the conditions of Korea's power system. The data for the integration cost calculation was based on information provided in the government's electricity supply plan announced last year. Integration costs for 2030 were calculated to range from $0.9 to $11.3/MWh for solar, $5.4 to $12.2/MWh for onshore wind, and $5.3 to $9.6/MWh for offshore wind. For 2036, integration costs were calculated to range from $4.1 to $16.4/MWh for solar, $8.5 to $18.1/MWh for onshore wind and $8.2 to $15.4/MWh for offshore wind. These results not only indicate that integration costs vary according to the characteristics of the energy sources, but also provide an implication for quantifying the additional costs incurred due to increased system variability and uncertainty resulting from the expansion of solar and wind power considering the future conditions of the power system in Korea.