Measuring the efficiency of the investment for renewable energy in Korea using data envelopment analysis

New and renewable energy (NRE) has been paid much attention as a core alternative energy that can respond to the depletion of fossil fuel, the global movement to address climate change, and recent high oil prices because it is more environment-friendly and sustainable than fossil fuel. As the scale of investment in NRE has increased, an intriguing issue of the efficiency of the investment has been raised since strategic selection and focused investment allows policy goals to be achieved with limited resources and budget. Particularly, since there are various kinds of renewable energy sources, the efficiency of each NRE technology must be examined to find suitable technologies for the environments of each target country and to eventually realize efficient investments in NRE. The purpose of this paper is to evaluate the investment efficiency of three NRE technologies – wind power, photovoltaic, and fuel cells – with the DEA (data envelopment analysis) method considering the two policy objectives of public investment, technological development and wider dissemination of NRE in Korea. The results indicate that wind power is the most efficient renewable energy in Korea from the perspective of government investment.