In the process of implementing carbon neutrality around the world, eco-friendly energy such as renewable energy is expanding. Because renewable energy, however, is highly variable and has a distributed form of energy, new challenges are created in bal...
In the process of implementing carbon neutrality around the world, eco-friendly energy such as renewable energy is expanding. Because renewable energy, however, is highly variable and has a distributed form of energy, new challenges are created in balancing electricity demand and supply at the local level. Korea’s demand response projects have been mainly implemented in industrial and commercial sectors with high electricity consumption, but since 2018, small-scale demand response projects have been implemented for residential use as well. This study targets demand response projects in the industrial, commercial, and residential power sectors and estimates cost-benefit ratio (BC ratio), net present value (NPV), and internal rate of return (IRR). and break-even point (payback period). However, since the demand response project is a project in which the government intervenes and receives national subsidies, it should be analyzed separately from the government perspective and the user perspective. Additionally, in order to reflect the uncertainty of cost and benefit variable, this study intends to perform a stochastic economic analysis using Monte Carlo simulation methods. The result shows that in the case of the residential demand response project, the economic feasibility was very low from the government perspective due to the large amount of government subsidies, but from the user perspective, the economic feasibility was very high. In the case of commercial and industrial demand response projects, it was found that there was a need to expand their distribution as it is a desirable policy that can achieve a win-win for all stakeholders by securing economic feasibility from both the government and user perspectives.