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Research Reports

Research Reports

Study on the measures to increase renewable energy proportion in consideration of environment and resident acceptance
  • Author Sangbum Lee
  • Researchers
  • Date 2019-12-31
1. Background and Aims of Research
ㅇ The purpose of this study is to propose a system of compensating and supporting local residents to promote the distribution of renewable energy facilities including solar and wind power generation, in part through a profit-sharing mechanism, based on the scale of residential environmental impact.
ㅇ The government's policy is to expand the proportion of renewable energy, but only a small percentage of facilities have actually been installed and are currently in operation after permits for power generation projects were issued. This is mainly due to delays in construction permits, construction procedures, or delays due to opposition from local residents.

2. Cases of Local Residents’ Participation and Conflict in Renewable Energy Development
ㅇ Most reasons for local resident’s opposition in the public disclosure and opinion gathering process of Environmental Impact Assessments are mostly about environmental destruction and residential environmental impact, but some have expressed a desire for compensation.
ㅇ However, despite clear environmental impacts on residential areas, such as noise caused by inland wind power generation, consultations with local residents, such as compensation and profit sharing, are carried out under the responsibility of individual business entities without formal standards or guidelines. As a result, compensation differs depending on the region and farm, resulting in a significant increase in conflicts and complaints between local residents and wind power business entities.

3. Compensation Cases and Perceptions of Renewable Energy Development Abroad
o Compensation cases of renewable energy
ㅇ United Kingdom
- Reductions in real estate value and compensation for residential environmental impacts from wind farm operations are being provided to local residents a vinicity of the wind farms.
ㅇ Germany
- The sharing of profit from wind power generation with neighboring residents begins when the wind farm begins operation. Without the profits of wind farm operation, there is no compensation to local residents because they do not suffer from environmental impacts before the wind farm begins operation.
ㅇ Australia
- To minimize social conflicts of wind power generation, the Australian government adopted a measure to compensate local communities, based on the “Wind farm guide for host landholders.”

o Perceptions of renewable energy
ㅇ Germany
- According to an annual survey of the renewable energy acceptance rate, 89 to 95% of people agree to build renewable energy and they are also willing to accept the presence of renewable energy facilities around their residences.
- Solar power farms have the highest acceptance rate, at 77 to 83%. 63% of respondents say they will accept any renewable energy facilities, noting that the more opportunities they have to come into contact with them, the higher the rate of their acceptance. 55% say they can accommodate wind farms in residential areas: this figure increases to 69% if there are facilities around them.

4. Scale and Scope of Residential Environmental Impacts of Renewable Energy
The noise impact of inland wind power on residential area is well known, but most of the controversial environmental effects of inland photovoltaic power generation are false.

o Inland wind power
ㅇ The noise impact of inland wind power exceeded night noise standards up to 1,030m, and the low frequency influence range exceeded 1km, showing that the noise and low frequency influence range of wind power generators could extend more than 1,000m.

o Inland solar power
ㅇ There is no evidence of residential environmental impacts from solar power generation. But for large-scale solar power facilities, the aesthetic impact on residents of such a transformation should be carefully evaluated.

5. Benefit-Sharing Measures of Renewable Energy based on Residential Environmental Impacts
ㅇ In order to promote the supply of renewable energy, compensation and profit sharing measures should be prepared for local residents who are expected to be directly affected by the development of renewable energy, but, as there are no laws or guidelines in Korea, it becomes a major factor of social conflict.

o Inland wind power
ㅇ Based on previous research results and overseas cases, wind power business entities are required to share profits with residents living within the range of noise and low frequency and shadow flickering caused by inland wind power generation once generation operations begin and revenue is produced. For residents living in some areas of ordinary influence, direct compensation measures, such as migration or monetary compensation, should be provided. In addition, residents indirectly affected by inland wind farms are provided opportunities to participate the wind and solar farm business through additional incentives.

o Inland solar power
ㅇ In case of inland photovoltaic power generation, it is necessary to adopt measures that encourage local residents’ cooperatives lead solar power projects through the provision of additional REC incentives. In particular, low-income residents living in indirectly-affected areas by inland wind or photovoltaic power generation have problems in that they cannot share in renewable energy generation profits because they do not have the investment capacity to participate publicly through equity or fund investment. In order to supplement this, a measure for sharing profits should be prepared through the Local Village Development Fund or the Act on Supporting Areas around Power Plants.

6. Conclusions and Suggestions
ㅇ In order to encourage residents’ acceptance of renewable energy, the Ministry of Trade, Industry and Energy should lead in preparing standards and guidelines for compensation and profit-sharing for residents on the receiving end of direct and indirect environmental effects of renewable energy generation facilities. In particular, the Renewable Energy Residents' Compensation and Benefit Sharing Guideline should be designed to prevent problems that require excessive compensation for residents in areas where residential environment impacts due to renewable energy development are not objectively verified and directly or indirectly affect them. Institutional improvements should be made to ensure that local recipients are not excluded from renewable energy generation revenues.