Gov‘t to shift renewable energy system
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The plan was part of a government strategy initiative released on Thursday by the Ministry of Trade, Industry, and Energy in the presence of executives from the renewable energy industry.
“Renewable energy’s rapid expansion has led to increased burdens on the power system and public costs. The ministry aims to promote a more organized expansion of the renewable energy market,” according to Jeong Kyung-rok, the ministry‘s director general for renewable energy policy.
Within the current system, Renewable Portfolio Standards (RPS) obligations require those who generate 500 megawatts (MW) or more to use renewable energy for a certain portion of their total power generation. The system forces the Korea Electric Power Corp (KEPCO), its subsidiaries, and private power producers to generate their own renewable energy and purchase renewable energy certificates (RECs) from solar companies for any shortfalls.
But suppliers usually prefer to buy RECs rather than generate renewable energy, which caused a surge in the number of small-scale solar operators. The costs of purchasing the RECs are passed on to public consumers via electricity bills, which amounted to 4 trillion won ($2.9 billion) in 2023 alone.
“Solar power facilities that succeed in the auction market can sell electricity at a long-term fixed price for 20 years. If REC prices go down due to price competition, this will ultimately be reflected in electricity bills,” an official from the Ministry of Trade, Industry and Energy explained.
The Ministry of Trade, Industry and Energy is also aiming increase offshore wind power’s share in the Korean renewable energy market and is requesting the prompt processing of the Special Act on the Promotion of Wind Power Generation Supply’ that is currently pending in the National Assembly. “The government must quickly legislate a system that supports site discovery, consultations with residents, and support for permits.” Jeong emphasized.
However, strong opposition indicates that there will be challenges until the law is implemented.
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