Diffusion of renewable energy technologies in South Korea on incorporating their competitive interrelationships

Renewable energy technologies (RETs) have attracted significant public attention for several reasons, the most important being that they are clean alternative energy sources that help reduce greenhouse gas emissions. To increase the probability that RETs will be successful, it is essential to reduce the uncertainty about its adoption with accurate long-term demand forecasting. This study develops a diffusion model that incorporates the effect of competitive interrelationships among renewable sources to forecast the growth pattern of five RETs: solar photovoltaic, wind power, and fuel cell in the electric power sector, and solar thermal and geothermal energy in the heating sector. The 2-step forecasting procedure is based on the Bayus, (1993. Manage. Sci. 39, 11, 1319–1333) price function and a diffusion model suggested by Hahn et al. (1994. Marketing Sci. 13, 3, 224–247). In an empirical analysis, the model is applied to the South Korean renewable energy market.