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Optimal Renewable Energy Procurement Strategies for Korean Power-Intensive Enterprises: A Mixed Integer Linear Programming (MILP) Model Approach

한국 전력 다소비 기업의 최적 재생에너지 조달 전략 연구: 혼합정수선형계획(MILP) 모델을 기반으로

Tae Kwon Kang1
,
Jong Roul Woo1
,
Chul Hun Choi2*
강 태권1
,
우 종률1
,
최 철훈2*
1Graduate School of Energy and Environment (KU-KIST GREEN SCHOOL), Korea University, Seoul, 02841, Korea
2Department of Business Administration, Sejong University, Seoul, 05006, Korea
1에너지환경대학원(그린스쿨), 고려대학교, 서울, 02841
2경영학부, 세종대학교, 서울, 05006
*Corresponding Author
31 March 2025. pp. 49-60
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Abstract

This study develops a Mixed Integer Linear Programming (MILP) model to identify cost-minimizing renewable energy procurement strategies for a power-intensive Korean enterprise (annual electricity use of approximately 3,392 GWh). The model incorporates various renewable energy options—including solar PV self-generation , Power Purchase Agreement (PPA), Renewable Energy Certificate (REC), and green tariffs—along with Energy Storage System (ESS) and Factory Energy Management Systems (FEMS), to achieve 100% renewable electricity by 2050. It explicitly accounts for capital and operating expenditures, carbon credit savings, and the residual value of installed facilities. The optimization results suggest installing maximum possible solar PV and FEMS from 2024, rapidly adopting green tariffs from 2025, and gradually expanding PPA uptake from 2026 onward as the most cost-effective strategy. Under this scenario, total discounted costs reach 8.94 trillion KRW—about 2 trillion KRW less than purchasing all electricity from the utility grid. Sensitivity analyses under six alternative scenarios confirm that renewable energy prices, ESS costs, carbon credit trends, and industrial electricity tariffs influence the overall cost of optimal procurement portfolios. These findings offer meaningful guidance for corporate decision-makers and underscore the necessity of supportive government policies to facilitate cost-effective decarbonization of Korea’s industrial sector.

Keywords
RE100
MILP
Solar PV self-generation
PPA
REC
Green tariff
ESS
FEMS
Carbon credit
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Information
  • Publisher :Korea Photovoltaic Society
  • Publisher(Ko) :한국태양광발전학회
  • Journal Title :Current Photovoltaic Research
  • Volume : 13
  • No :1
  • Pages :49-60
  • Received Date : 2025-02-06
  • Revised Date : 2025-02-19
  • Accepted Date : 2025-02-23
  • DOI :https://doi.org/10.21218/CPR.2025.13.1.049
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