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

Seoungbeom Na, Woosik Jang () and Youngwoong Lee
Additional contact information
Seoungbeom Na: Department of Civil Engineering, Chosun University, Gwangju 61452, Republic of Korea
Woosik Jang: Department of Civil Engineering, Chosun University, Gwangju 61452, Republic of Korea
Youngwoong Lee: Department of Civil Engineering, Chosun University, Gwangju 61452, Republic of Korea

Sustainability, 2024, vol. 17, issue 1, 1-18

Abstract: 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.

Keywords: floating solar power plant; economic feasibility analysis; Real Options Analysis (ROA); renewable energy strategy; market volatility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/17/1/137/pdf (application/pdf)
https://www.mdpi.com/2071-1050/17/1/137/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2024:i:1:p:137-:d:1554852

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().