Optimization of Korean energy planning for sustainability considering uncertainties in learning rates and external factors

During the last few decades, energy planning has focused on meeting domestic demand at lower total costs. However, global warming and the shared recognition of it have transformed the problem of energy planning into a more complex task with a greater number of issues to be considered. Since the key issue is to reduce greenhouse effects, governments around the world have begun to make investments in renewable energy systems (e.g., hydro, wind, solar, and/or biomass power). The relatively high costs of renewable energy systems and the uncertain outlook of their rate of diffusion in the market make it difficult to heavily rely on them. The uncertain variations in production cost over time are especially challenging. To handle uncertainties, the concept of the learning rate was adopted in this study so as to compute the costs of energy systems in the future and Monte Carlo simulation was performed. The aim of this study was to optimize plans of conventional and prospective renewable energy systems with respect to production cost. The production cost included capital, fixed, variable, and external costs. For the case study, the energy situation in South Korea was used. The results of the case study where the proposed methodology was applied could provide useful insights economically and strategies of sustainable energy management for ambiguous environments. -- Highlights: ► We propose energy planning method for sustainability. ► We consider uncertainties such as learning rate, fuel prices, and CO2 prices. ► We consider the possibility of CO2 trading. ► The proposed method is applied to South Korea case. ► The added capacities of energy systems depend on uncertainties.