Influencing factors on hydrogen energy RD projects: An ex-post performance evaluation

Abstract

To enhance its energy security, Korea made a significant RD investment in developing hydrogen energy technology over a period of 10 years. The Hydrogen Energy RD Center was established in 2003 with a 100 billion Korean won (KRW) government investment that would fund the initiative through 2012. This paper is a meaningful attempt to evaluate the ex-post performance of completed hydrogen energy RD projects using data envelopment analysis (DEA). Through empirical analysis, we focus mainly on measuring ex-post performance and uncovering the influencing factors on that performance. The results of our empirical analysis reveal several interesting findings. First, overall, the ex-post performance of completed projects is relatively low. However, there are major performance gaps among projects. Second, RD type, technology type, and private sector investment are factors influencing project performance. More specifically, projects identified as basic research, storage technology, or without private sector investment had the highest performance, with an acceptable level of statistical significance. Third, DEA can provide unique information, such as results of returns to scale and slack analysis, which cannot be gleaned from parametric methods. As time went on, the decreasing returns to scale (DRS) ratio increased, and the increasing returns to scale (IRS) ratio decreased. This means that the RD budget was used less and less effectively as time passed. Moreover, among the three-year project period, the second year's RD budget was used most efficiently in each RD project. This study can provide meaningful information to policy makers to enhance the performance of future RD projects and to promote hydrogen RD projects as well as advance the hydrogen economy.