A Case Study of Resolving Conflict in Energy Infrastructure Siting by the Solar PV Project

Home , Miryang

Current Photovoltaic Research 8(3) 79-85 (2020) pISSN 2288-3274 DOI:https://doi.org/10.21218/CPR.2020.8.3.079 eISSN 2508-125X

A Case Study of Resolving Conflict in Energy Infrastructure Siting by the Solar PV Project Jonghwan Lee1) ․ Dong-hwi Shin1) ․ Soohee Han2) ․ Jae Hyung Roh3)* 1)Department of Renewable Energy, KEPCO, Naju 58322, Korea 2)Department of Creative IT Engineering, POSTECH, Pohang 37673, Korea 3)Department of Electrical Engineering, Konkuk University, Seoul 05029, Korea

Received September 4, 2020; Revised September 9, 2020; Accepted September 14, 2020

ABSTRACT: The growing demand for new energy infrastructure has often been encountered with the difficulties of siting in power plants and electric transmission lines. Siting such large-scale and complex facilities produces so many-sided issues that it is highly necessary to develop an approach to resolving the related problems and conflicts. This paper introduces how the stakeholders have handled the issues and resolved conflicts with residents opposed the construction of 765 kV transmission line. The solar photovoltaic power generation, called “Hee-Mang Sunlight Power project”, is used for persuading residents to agree with constructing high-voltage transmission line and sharing benefits. It is considered how the project performance such as generation output and resident’s profits is and proposed what the project should be revised and supplement. The project is shown that the intractable spiting in energy systems can be smartly resolved with cost-effective institutional solutions instead of relatively expensive technical ones. Key words: Extra high voltage transmission, PV solar power, National perspective, Business model, SMP, REC

Nomenclature 1. Introduction

T/L : transmission line While the power demand are getting increased, construction D/L : distribution line of facilities such as power plants and electric transmission lines 1-4) Rre : revenue of renewable energy sale is getting worse in recent years . The main reason of

Psmp : system marginal price difficulties is hard to make a decision for the construction site or

Prec : price of REC (Renewable Energy Certificate) passage of transmission line due to the environment issues and 5,6) Ere : generated renewable energy conflict among related stakeholders . It was found that the existing solutions such as financial reimbursement were not Subscript enough to achieve everyone’s satisfaction peacefully7-10). Most of issues that residents concerned about high voltage facilities

KEPCO : Korea electric power corporation would have a negative effect on the value of their properties and MOU : memorandum of understanding the environment of around their residential area. Also in Korea, SPC : special purpose company KEPCO (Korea Electric Power Corporation) has made various REC : renewable energy certificates efforts in order to counteract such concerns and to mitigate the RPS : Renewable Portfolio Standard opposition of residents. Especially, related parties have found SMP : system marginal price ways to resolve the conflict of interest through legislation of PV : photovoltaic supporting laws, establishment of supportive committees and MOF : metering out fit development of renewable energy projects. The conflict had SPMS : solar power management system been approached to the common solution. Among the various approaches to resolving the dispute, the solar photovoltaic power generation project involving local residents, called *Corresponding author: [email protected] “Hee-Mang Sunlight Power project”, which has been remarkably

ⓒ 2020 by Korea Photovoltaic Society This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

79 80 J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020) effective in resolving the dispute will be presented in the Commission from Korean government formed a committee to subsequent sections. resolve the issue. However, the conflict between committee and the residents had been continued and the work was halted over 2. Resistance for 765 kV T/L construction 11 times and delayed its completion by more than three years from the original target. The five-year long conflict peaked in

As the national income level, social consciousness, and January 2012 when a 74-year-old resident died during a protest. welfare demand increase, people become more concerned with The project’s opponents claimed that the transmission line their quality of life and values like equality and human rights. could have detrimental effects on health, citing a 2003 World Concurrently, the social conflict among stakeholders is getting Health Organization report warning of possible carcinogenic worse8). The social conflicts can have negative effects on a effects of such facilities. Although KEPCO increased the level construction project and may even lead to a project becoming of compensation, the residents rejected the company’s offer and unsustainable. continued to oppose the project asking for the transmission lines As Korea’s rapid economic growth has demanded enormous to be installed underground. amounts of electricity, Korea has faced the same siting difficulty along with the global trend. As seen in Fig. 1, Miryang city is 3. Solutions for the conflict located at in the southeastern part of the Republic of Korean peninsula and close to Busan that is the second largest city in the As one of the actions for mitigating the siting conflict, country. A nuclear plant is being constructed in Singori near representatives of interested parties including residents and Busan to transmit electricity to Seoul. Simultaneously, sixty- KEPCO organized the supporting committee for the Miryang nine (69) transmission towers were decided to be constructed in construction, called the Miryang Special Support Committee five (5) villages of Miryang. The construction began in August (MSSC). KEPCO also organized several meetings with the 2008 and scheduled to complete the work by December 2011. residents to discuss effective solutions and KEPCO including However, the construction was not completed as planed due to six generation companies and residents finally reached an the resistance by some residents. agreement to settle the issues by establishing the Solar Power Residents barricaded the path to a construction site in Company Ltd., which would construct solar power plants on Miryang as seen in Fig. 2. Representative of residents held the sites around and under 765 kV transmission towers and lines, first rally calling for the scrap of the project in July 2008 and in and share their operating profits with the participating residents the following year the Anti-Corruption and Civil Rights The MSSC proposed the thirteen (13) possible solutions as seen in Table 1 for the nearby residents. In order to implement the solutions, KEPCO signed the MOU (Memorandum of Understanding) with the Ministry of Trade Industry and Energy (MOTIE), Korea Energy Management Corporation (KEMCO), representatives of the MSSC on September 11, 2013. The main

Table 1. Proposed the possible solutions

1. Continuous support business in Miryang 2. Solar power plant business Fig. 1. The route of 765 kV T/L 3. Miryang tourism industry support 4. Purchase houses near 765 kV T/L 5. Housing environment improvement around facilities 6. Creating jobs by community-based enterprises 7. Building the market for direct agricultural products 8. Compensating private properties near facilities 9. Establishing open market for local specialties 10. Special recruitment for Miryang citizen 11. Running dormitory in Seoul area for local students 12. Health screening support Fig. 2. Opposition to construction of 765 kV T/L 13. First priority for underground cable in Miryang J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020) 81

Table 2. REC multiplier for solar PV in Korea

Multiplier Facility type Criteria 1.2 Less than 100 kW 1.0 On normal site More than 100 kW 0.7 More than 3,000 kW 1.5 Less than 3 MW On existing buildings 1.0 More than 3 MW 1.5 Facilities floating of the water

Table 3. Renewable energy policies in countries Fig. 3. MOU signing ceremony for Solar PV project Country Key Policy content was that all the stakeholders should closely collaborate Germany Auction system and FiP (Feed-in-Premium) Japan Auction system and FiT (Feed-in-Tariff) with each other to develop Miryang solar power project. USA Tax Credit and RPS The solar project, which installed solar energy systems on Australia RPS and FiT Korea RPS building rooftops of nearby villages and on sites close to 765 kV transmission towers and share generated profits with partici- Under the Renewable Portfolio Standard (RPS) policy, the pating residents, is the first attempt in Korea collaborating with revenue of renewable energy sales can be calculated as below: residents nearby extra high voltage transmission towers and lines. Rre = (Psmp + Prec × α) × Ere (1) Each organization who signed the MOU as seen in Fig. 3 was in charge of ensuring successful development and operation of Rre: Revenue of renewable energy sale [USD] the Miryang solar power project and had their own work scope. Psmp: SMP (System Marginal Price) [USD/kWh] As the main developer, KEPCO established the special purpose Prec: Price of REC [USD/kWh] company (SPC) with six (6) generation companies to develop α: REC multiplier and operate the project. The role of Six generation companies Ere: Generated renewable Energy [kWh] was to purchase Renewable Energy Certificates (RECs) from the SPC. Residents, who possessed land or houses around the In the case of solar power, the REC multiplier ranges from 0.7 transmission towers and lines which would be constructed, to 1.5 depending on the type of land site used for solar facilities could participate in the project by leasing out their properties and the capacity of the power plant. For the Miryang solar power and would get rental fees or directly invest in the SPC by bond- project, a 1.2 REC multiplier is applied for the calculation of its holders. MOTIE and KEMCO’s roles are to provide legal and revenues. According to the regulation, if the residents’ invest- financial supports. Municipality was in charge of providing ment amount accounts for more than 30% of the total project, an necessary administrative support such as permissions and extra weight multiplier of 120% could be applied to its standard approvals until the successful completion of the project. REC multiplier. For this reason, KEPCO had put in efforts to increase the residents’ investment amount to above 30% of the 4. Considerations for PV power project total project construction costs, and then it was successful in exceeding the 30% ratio. Table 2 and 3 show that the REC 4.1 Policy support multipliers according to the government regulation in Korea and With most transmission towers and lines located in other countries. mountainous terrains, such projects are expected to have low Furthermore, as a way to enhance the project profitability, profit due to high construction costs required to clear the sites in KEMCO, a government controlled institution and one of the addition to poor solar radiation due to the tree and mountain MOU-signed parties, was preparing to offer project loan of up to shades surrounding the area. This makes government support all 40% of the total project costs at a low interest rate of 1.75% the more essential in relation to the project success in terms of through its renewable energy financing support scheme. related legislation, permits, and financial assistance in order to ensure project profitability7). 82 J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020)

Table 4. Options of resident participation

Options Profit Earnings ratio Land lease Rental fee Official value × 5% Rooftop lease Rental fee 109 USD / kW / year Cash Investment Interest earning 5% (bonds)

4.2 Resident participation The second prerequisite is the participation of local residents living near the extra high voltage transmission towers and lines. Fig. 4. Solar PV project sites around 765 kV T/L

It is important to include as many residents as possible in the Table 5. Site application results (land) project and to share project profits with the participating No. of Qualified sites residents because one of the main purposes of the project was to application No. of sites Capacity Project costs alleviate the opposition against construction of transmission 75 18 4.1 MW 10 mil. USD towers near villages. SPC has offered return rates higher than (1,739,000 m2) (150,000 m2) the market interest rates for the project period in order to Table 6. Qualified Site application results (rooftop) encourage to participate in the project. KEPCO proposed two (2) options for residents to participate in the project. The first No. of houses Capacity Installation costs option was that residents could purchase bonds offered by the 40 0.12 MW 0.24 mil. USD SPC and get returns on their bond investment. Residents could In addition, the fairness was considered as one of the earn an interest rate of 5% a year which is relatively higher than important factors in the site selection process since the main the average market interest rate of 3%. Considering that most of reasons of this project was offering a part of profits with local the participants were old people who may require retirement residents and alleviating their animosities against building extra savings in the future, KEPCO needed to make a plan to institute high voltage transmission towers in their area as seen in Fig. 4. a policy that allowed residents to withdraw their money through The gaining should be different between lessor and just land selling bonds after five years from first fiscal year. The second owner. Therefore, in order to avoid any conflict or protest from one was leasing their real estate for the project facilities and then the involved residents, KEPCO firstly began process to obtain get rental fees from the SPC. Residents, who own lands within an application forms and agreements from the interested local 1.45 km from the transmission lines, could lease out the land and residents. The applications and assigned lands were assessed by get a rental fee of 5% a year which is relatively higher than Adequacy Assessment Committee (AAC) including third party market rental fee of 2%. For the house rooftops, the residents photovoltaic specialists in order to ensure fairness for the have been paid 109 USD /kW per year relatively higher than the review. market 23.4 USD/kW per year. Table 4 summarizes options of resident’s participation. 5. PV project for benefit sharing

4.3 Project location The third prerequisite is the selection of appropriate sites in 5.1 Project scale order to achieve maximum power generation efficiency at a The due diligence result of the site applications showed that 2 minimum cost. Most of transmission towers in Korea are an area of 150,000 m was qualified for the project installation 2 located across mountainous terrains, which means such out of the total area of 361,000 m in the eighteen (18) sites locations not only result in poor solar power efficiency due to which potential capacity could be 4.1 MW. Especially, over tree and mountain shades, but also high project costs due to the forty (40) houses had enough space on its rooftop. The potential civil engineering flatting the site. For the environment or budget capacity and installation cost for 18 sites and 40 houses are issue, the selection for the project location should be considered summarized in Tables 5 and 6. carefully. J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020) 83

Table 7. Low voltage equipment (less than 100 kW)

Module Inverter Panel board Efficiency ≥ 15.3% Efficiency ≥ 96% 1Φ220 V, 3Φ380 V Crystalline String Outdoor type

Table 8. Extra high voltage equipment (over 100 kW)

(a) (b) Module Inverter Cubicle Fig. 5. Solar power plant: (a) nearby T/L, (b) rooftop Efficiency ≥ 15.3% Efficiency ≥ 96% 3 Φ 22.9 kV Crystalline String Outdoor type 5.2 Operational scheme The Miryang solar power project is distinguished from distribution boards for solar power generation, extra high general solar projects in terms of its characteristics: project voltage equipment required additional breakers, transformers, purpose, location and benefit sharing. While general solar and Metering Out Fit (MOF) for distribution grid connection. projects focus only on maximizing profits by locating system in Low and high voltage equipment are shown in Tables 7 and 8. high power-generation-efficient areas and installing large scale In order to maximize power generation efficiency, KEPCO solar power plants, the Miryang project not only was building applied the suitable array type for each project location; small scale power plants within 1.45 km radius of 765 kV fixed-slope type, south-fixed type or variable-slope type. transmission towers and lines as seen in Fig. 5, which are not the Different types were applied to the Miryang solar power project most ideal locations for solar power generation, but also are depending on the type and characteristics of each project site sharing a part of its profits with the participating residents. Since available. the project was expected to incur higher cost than the generals, KEPCO needed to focus on improving its generation efficiency 5.5 Grid connection and reducing its operation and maintenance expenses through The generated power from the solar power plants is utilizing its generation subsidiaries and their resources. transmitted to the main grid operated by KEPCO as the only utility company in Korea. Even though SPC established by 5.3 Construction and system installation KEPCO had developed the Miryang project for construction of The project was scheduled to start the construction in 2015 765 kV transmission line, the grid code regarding renewable and would have been completed by the end of 2016 as planned energy source connection should be strictly adapted to any if there was no force majeure. However, the project was finally developers. For this reason, SPC had carried out a detailed study completed in May 2019. First of all, among residents had on five distribution lines which would be connected to solar different opinion and requests such as period or condition to generator in the Miryang project. According to the result of lease their own land for solar power generation and it made the study, it was not considered that there was substantial impact schedule delayed. Secondly, the permission of construction was such as frequent voltage swells and sags, power factor in the postponed by local government even though they signed up on near future when the system was connected to the grid, but SPC MOU to support. The reason was some residents who were not installed a voltage regulating system which could control the participated in or compensated opposed to build the PV system inverter’s reactive power as well as the D/L voltage fluc- 9-12) near their villages. It had taken time more to receive permission tuations . The system has been operated normally without and the commencement was delayed. any punishment or disconnection by the utility company KEPCO since it started to generate. 5.4 System configuration Twenty-five (25) solar power plants consisting of ten (10) 6. Project performance 22.9 kV high voltage plants and fifteen (15) 380 V low Voltage power plants were built in Miryang city. Total capacity is 2.4 6.1 Benefit sharing MW and the highest one is 1 MW. While low voltage facilities The capacity of Miryang project is finally 2.4 MW with ten only were comprised of modules, connectors, inverters and (10) land sites and fifteen (15) rooftop of house. The investment 84 J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020) of residents is around 2.2 mil. USD among Total Capex 6.1 mil. same region but away from the transmission line. The range of USD. SPC has provided residents the profit of bond investment difference is from 15% to 26% according to the season. The with 5% interest and land rental fee. Each amount was 112,391 biggest difference is shown in the winter season because the USD and 59,104 USD while total annual sale was 564,216 USD height of the sun is low and the transmission lines cast the long in 2019, and it would be offered for twenty (20) years for a shadow. Figs. 7 and 8 shows that the plant is located under 765 project period. The residents who participated in the project are kV T/L. mostly satisfied with profit income and benefit. However, the It means that Miryang solar PV plant cannot generate full net income or profit of SPC is getting down because the price of power with high efficiency and the revenue of SPC is abnormal SMP and REC has been decreased and expenditures like land even though the project purpose is preferentially considered. lease and financial interest have been fixed by the contract. Nine (9) solar PV plants of ten (10) are located nearby or under 765kv transmission line as the result of utilizing worthless land. 6.2 Operating renewable energy system The shared profit for residents is not affected by performance of Since the success of solar project is highly influenced by the PV power plant at all because the contract was signed the fixed amount of solar radiation and project costs, it is not easy to interest for bond and land lease with the inflation. implement and achieve solar projects in Korea. The range of KEPCO and SPC verified how the shade of transmission latitude in Korea is from 34 °N to 43 °N. Cities like Washington tower and lines affected the PV system and generated power DC and Lisbon are located in the similar latitude. The average of utilizing the photovoltaic system simulation software (Solar Pro efficiency is around 15% (working hour is only 3.6 hours a day) version 4.5). The generated power and efficiency is diverse in Korea while the radiation and heat reach and generate the according to the season and location of transmission facilities. power on a PV panel for a day. It does not mean that the The configuration of PV module in the plant is the series condition of solar PV generation is quite good such as gulf area connection. For example, 300 W ten (10) modules are inter- or some countries around the equator line. Even the land under connected with a series and the string with ten modules is transmission line is much severe than flat land or sea coast due connected to 3 kW inverter. 100 kW power plant is comprised of to the shade of tree and tower itself. thirty three (33) inverters. The important point is system output On average, the generated power of Miryang project is lower in the series connection when the shade make system than any PV power plant with same capacity and condition. One performance lower. The current in the series connection is same of the PV plants located under the 765 kV transmission line and amount from each modules. It means that the total output current system output records the generated power around 20% lower than other sites. Fig. 6 represents the comparison of generated power between Miryang and other sites which are located in

(a) (b)

Fig. 6. Comparison of generated power

Table 9. Power loss due to shade dimension

% of shade 0% 8% 11% 17% 25% Fig. 7. Solar PV site and drawing under 765 kV T/L Power loss 0% 22% 44% 61% 67% J.H. Lee et al. / Current Photovoltaic Research 8(3) 79-85 (2020) 85 of array shall be dropped down, if one of module has problem References due to shade or defect like blazing. SPC has considered this issue and studied. The Table 9 shows the result of simulation using 1. Jeon, H. J. “An analysis of mediation communication for Solar Pro program. public conflict: focusing on the siting conflict of Buk-Ansan sub- station,” Crisisonomy, Vol. 12, No. 5, pp. 97-117, 2016. 7. Conclusion 2. An, Y. C., “Managing public disputes; Lessons from the transmission line siting in the united states,” Institute of Govern- mental Studies, Vol. 20, No. 2, pp. 431-463, 2014. Utility company has been experiencing extreme difficulties 3. Dlouhy, M., “Location of unwanted facilities in Prague: NIMBY in building extra high voltage transmission towers and in public administration hierarchy,” Prague Economic Papers, transmission lines, which involved persistent social resistance Vol. 26, No. 2, pp. 1-13, 2016. from various interest groups. One of the worst cases was the 4. Jeon, H. J., “Resident’s behavioral patterns in siting locally unwanted facilities-focusing on conflict cases on waste treatment Miryang transmission tower construction, which faced the most facilities,” Crisisonomy, Vol. 13, No. 7, pp. 35-49, 2017. notorious and long-term oppositions from its residents over the 5. Choi, Y. U., “Improvement of NIMBY facilities route planning past decade. Such resistance from residents prolongs the considering social conflict,” Journal of Korean Society of Civil construction schedule and makes the budget increase. The main Engineers, Vol. 38, No. 3, pp. 487-496, 2018. reason opposing against extra high voltage transmission towers 6. Keegan, G., “The contribution of distributional justice to siting and lines is that their properties could be decreased. The transmission lines,” Journal of Mediation and Applied Conflict Analysis, Vol. 1, No. 2, pp. 94-105, 2014. financial value of their land and houses near the transmission 7. Yi, H. and Feiock, R. C., “Renewable energy politics: Policy towers generally fell down due to many regulatory restrictions typologies, policy tools, and state deployment of renewables,” such as building and development regulation of the nearby area. Policy Studies Journal, Vol. 42, No. 3, pp. 391-415, 2014. KEPCO and stakeholders proposed to the residents the solar 8. Lee, T. J., “An empirical assessment of the influence of PV power plant for the compensation and sharing profit from it. transparency and trust in government on lay citizens’ commu- The project supported by Korean government and municipality nicative actions relative to conflict of interest in the public service,” Journal of Public Relations, Vol. 20, No. 3, pp. 84- was launched in 2015 and completed by stage in 2019. Since the 112, 2016. plants were operated, the profit was preferentially distributed to 9. Wei, J., Zhang, Y., Wang, J., Cao, X., and Khan, M. A., the residents. However, the efficiency and health index of SPC “Multi-period planning of multi-energy micro-grid with multi- shall be considered because some sites of plant are located near type uncertainties using chance constrained information gap transmission tower and line and the shade makes its decision method,” Applied Energy, Vol. 260, 114188, 2020, performance down. Even though the purpose of project is to 10. Choi, Y. S., “Solar power system planning and design,” Applied Science, Vol. 10, No. 1, p. 367, 2020. compensate their properties and share the profit, it is needed to 11. Li, Q., Wang, J., Zhang, Y., Fan, Y., Bao, G., and Wang, X., upgrade the system performance. In order to increase system “Multi-period generation expansion planning for sustainable efficiency, SPC has a plan to apply some techniques and devices power systems to maximize the utilization of renewable energy like DC converter or optimizer compensating power loss due to sources,” Sustainability, Vol. 12, No. 3, 1083, 2020. the shade and relocate the module configuration if necessary. 12. Palmintier, B. S. and Webster, M. D., “Impact of operational KEPCO expects that this solar power project will become a flexibility on electricity generation planning with renewable and carbon targets,” IEEE Trans. Sustain. Energy, Vol. 7, No. business model that will help alleviate local opposition against 2, pp. 672-684, 2016. construction of extra high voltage transmission lines by promoting the economies of the nearby village residents and enlarging the renewable energy industry.