Willingness to pay for replacing traditional energies with renewable energy in South Korea

This study aims to estimate consumers' willingness to pay (WTP) for replacing traditional energy generated from nuclear and coal sources with renewable energy, using a contingent valuation (CV) model. To this end, it reports the results from a CV survey of 1000 respondents and a spike model. The estimate obtained shows that consumers are willing to pay an additional USD 3.3 per month to replace nuclear power and USD 3.0 per month to replace coal energy. The total WTPs for the substitution of nuclear power and coal-fired power with renewable energy sources are calculated as USD 722 million and USD 659 million, respectively. When such a WTP is provided for installing photovoltaic equipment, the photovoltaic capacity of 372 MW for nuclear power substitution and 339 MW for coal-fired power substitution can be built every year, taking into consideration the backup cost and opportunity cost. Given that the WTP means the level of public acceptability of a rising energy bill, Korean consumers would accept an increase in their electricity bills caused by solar photovoltaic energy equivalent to 31–32 GW in the medium and long term. - Highlights: • There is a growing need to replace traditional energies with renewable energy. • We estimate consumers' willingness to pay (WTP) for the replacement. • To this end, a contingent valuation survey of 1000 households was conducted. • Monthly WTPs are USD 3.3 and 3.0 for nuclear power and coal, respectively. • These values amount to solar photovoltaic energy equivalent to 31–32 GW.