Evaluating a floating offshore wind farm: Households’ willingness to pay in South Korea

Abstract

South Korea intends to install a floating offshore wind farm (FOWF) with a capacity of 9 GW off its east coast by 2030. This article seeks to apply contingent valuation, analyze households’ willingness to pay (WTP) for this installation quantitatively, and derive some implications. Data on WTP were collected through a survey of 1000 households across the country. WTP was induced through the one-and-one-half-bound question method, and positive WTP and zero WTP were analyzed together through the spike model. Statistical significance was secured for the main estimation results of the model. The average WTP was KRW 3302 (USD 2.58) per household per month, which was about 7.5% of the average electricity bill. In addition, it was found that the respondents’ education level, income level, residence, and perceptions had a significant effect on their WTP. Finally, along with five challenges faced by the FOWF identified during the survey process, possible solutions to these are presented. For example, the most important challenge was acceptance by fishers.