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

• We develop a diffusion model incorporating the competition among renewables.
• A price function and a diffusion model are used in 2-step forecasting procedure.
• The annual demand through 2035 for five renewables in South Korea is forecasted.
• Wind power will maintain the largest market share in the electric power sector.
• The supply of geothermal energy will be larger than that of solar thermal energy.

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.