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. Current Status & Future of NRE in Korea
. 3rd Basic Plan for New & Renewable Energy
. Major Policy Tools - FIT, RPA, RPS
. RPS Target and Implemenation Plan
. Concluding Remarks
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Year Legislation Notes1987
Promulgation of The Promotional Act of NRE
DevelopmentLegal basis for NRE R&D
activities
1997Promotional Act of NRE Development,
Utilization and Deployment (1stAmendment)
Amendment for legal basis for
NRE dissemination
2002/3
Promotional Act of NRE Development,
Utilization and Deployment (2nd/3rd Amendment)
Obligation on public bldgs
(const. cost), certification, FIT
2003The 2nd National Basic Plan for NRE
Technology Development & Deployment10 year plan, target: 3%(2006),
5%(2011)
2004Promotional Act of NRE Development,
Utilization and Deployment (4th Amendment)
Including standardization,
RESCOs. etc.
2008 The 3rd National Basic Plan for NRETechnology Development and Deployment
Target: 2020(mid), 2030 (long), NREindustry promotion
2009/10Promotional Act of NRE Development,
Utilization and Deployment (5th Amendment)
RPS: 2012(2%) 2022(10%)
Obligation on public bldgs (load)
2011The 4th Natl Basic Plan for NRE Technology
Development & Deployment (underway)The 2nd Natl Energy Basic Plan
NRE industrialization, Export
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11 Categories : Solar PVs, Solar Thermal, Wastes, Bio(LFG, Bio-diesel), Hydro,
Geothermal, Marine, Wind, Hydrogen, Fuel Cell, Coal Liquefaction /Gasification
Waste and
hydro power
account for
more than
85% of TPES
Waste
74.9%
Hydro
10.0%
Bio
9.5%
Wind
2.4%
PV
2.0%
Fuel Cell
0.3%
NRE Deployments (thou. toe)
< Composition of NREs (2009) >
Hydro61.1%
Wind
14.8%
Solar PV
12.3%
Bio (LFG)
9.7%
Fuel Cell
1.8%
Biogas
0.1%
NRE Share in TPES (%)
< Power Generation from NREs (2009) >
5
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
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Business As Usual: BaU
Continuation and Maintaining of the Current Policy: Annual growth Rate
similar to that between 2003 and 2007
Way higher as compared to those growth rate of 1.3% and 0.9% in the
primary energy consumption during the same period
Strengthened Policy Strengthening R&D and Deployment Policy
Annual growth rate: much higher than those of BaU
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Deployment of NREs based on cost-effectiveness Biofuels, Ligneous Biomass, Tidal Power, etc.
Expansion of resource-recycled energy system based on wastes-to-energy
Strategic R&D and deployment: wind, solar PVs, H2/Fuel Cells
As a result, energy mix in NRE consumption shifted into a balanced one
Bio E PV/Wind% % % % % %
10,000
15,000
20,000
25,000
5000
30,000
35,000
2008 2012 2020 2024 20282016 2030
2.6%3.5%
6.1%
11.0%
5.7%
4.2%
3.1%
PolicyBaU
2006 2030 Bau 2030Policy
2.2%
5.7%
11%
103TOE
10,000
15,000
20,000
25,000
5000
30,000
35,000
Wastes
Solar ThSolar PV
WindBio
HydroGeotherm
OceanWastes
103TOE
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2010 2015 2020 2030 Avg. annualgrowth rate (%)
Solar 40(0.5)63
(0.5)342(2.0)
1,882(5.7)
20.2
PVs 138(1.8)313(2.7)
552(3.2)
1,364(4.1)
15.3
Wind 220(2.9)1,084
(9.2)2,035(11.6)
4,155(12.6)
18.1
Bio 987(13.0)2,210(18.8)
4,211(24.0)
10,357(31.4)
14.6
Hydro 972(12.8)1,071
(9.1)1,165
(6.6)1,447
(4.4)1.9
Geothermal 43(0.6)280(2.4)
544(3.1)
1,261(3.8)
25.5
Tidal 70
(0.9)
393
(3.3)
907
(5.2)
1,540
(4.7)
49.6
Wastes 5,097(67.4)6,316(53.8)
7,764(44.3)
11,021(33.4)
4.0
Total 7,566 11,731 17,520 33,027 7.8Primary Energy
(106TOE)253 270 287 300 0.9
Share 2.98% 4.33% 6.08% 11.0%
(Unit: 1,000 toe)
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Strategic Approach to Technological Innovation and Industrialization of NREs
Strengthening R&D Infrastructure based on Technology Planning &
Assessment
Goals
Establishment of Center for NRE Innovation 2020
Accelerating cost reduction by fostering leading companies
Integration of Industry-Academy-Research consortium and R&D hub
Short-term (2009-10) and Mid-term (2011-20) projects, core basic technologiesand industrial technologies (refer to programming core technology for industry)
Approach
Projects
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Development of Smart Energy System & Zero-Energy House to be applied to MillionGreen Home 2020
System development and performance test for NRE complexes
Solar PVs + Solar thermal + Geothermal with energy efficiency
technologies and electricity IT optimal system for a local community
Integration of Industrialization and Deployment Package deal with and
Technology transfer of and cooperative R&D with foreign companies IEA (IA, RETD), APP-REDG T/F, IRENA etc.
Development of Resource Map and Harnessing System ofNREs based on GIS/RS
Identification of detailed resource-base, exploring how to harness them
by NRE type
Development of systems for economic feasibility assessment
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Govnt-driven Encouraging the private sectors initiativeMandatory use of NREs in the public sector
A wide uptake of a variety of NREs
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2004-7 2008-12 2012-20 Total
Goal (unit) 17,400 94,150 913,000 1,024,550
Budget (109) 228 1,330 13,753 15,308
Village-based, local autonomy, Green Village Award (2010)
Unit: village, site: NRE mix to be decided based on village & sites
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Million green homes to be deployed by 2020 (including multi-family home)
Reinforced insulation(passive), NRE installation(active) energy savings vs existing
residential house: 93% less of maximum heating cost and 50% of cooling cost
Gov. & local autonomies encourage deployment through subsidies & tax reduction
Solar hot water system
BIPV PowerGen
* GreenHome Model House(Kwacheon Gov. Complex)
Solar PV system
Waste heat recovery
Ventilation system
Enhanced InsulationUltra energy saving window
Exterior Electric ShadeInsulated door
Geothermal Heating
Fuel Cell System
LED lighting
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Sunsetting of FIT
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Million Green Homes Program
RPS
Feed-In-Tariff
100,000SolarPVs
GreenVillages
Loan for NRE Facilities Installation & InvestmentLocal Autonomys Subsidy Program
Gradual Reduction in SubsidySubsidy to NRE Facilities
R PARFS: BD20, BD85Biofuel Deployment
FFVs Deployment
Strengthening of NRE Standardization/Certification
Wind 2000 (Deployment of 2,000MW by 2020)
Obligation of Public Building (Energy Load)Obligation of Public Building(Construction cost)
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Fostering Domestic NRE industry via indigenization of core technologies Cooperation b/w large enterprizes and SMEs industry cluster of systems,
components, and materials
Domestic NRE industry export industry global business entities Solar PVs: semi-conductor, display industry
Wind: construction and heavy industry
H2/Fuel Cells: leading companies, components large scale technical validationand demonstration projects
2012Today 2030
Wind
IGCC
H2/FC
PV Rooftop PV cell massproduction MW class turbine
Development
Project center
established
Technological validation
& Demo
Development of Nextgeneration PV Cells
5-6MW turbine
commercialized
Commercial proto-type of
300MW
Indigenization of core
components
Increased market shareby exporting NREs
Export industry of NRE
technologies & system
Fostering new growth
engine via NREs
Pioneering in overseas
market
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Encouragement of technological advance based on market mechanism
Larger uptake of NREs in response to the UNFCCC
Fostering NRE industry via market expansion for NREs
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Renewable PortfolioAgreement: RPAFirst MOU in Jul 2005
Second MOU in Jul 2009
Renewable PortfolioStandards: RPS
The bill is under considerationin National Assembly
Pricing mechanism to purchasethe power generated by NRDs
Voluntary agreement b/w
government & energy publiccorporation for NRE use
Target setting and pricing
based on market mechanism
Paying premium prices based on
production costs by energy type
Setting a target by levying madatory
volume or share on power generator
Feed-In Tariff: FITSince Jan. 10
Necessities
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Feed-In Tariff (FIT) Subsidize cost difference between NRE powered generation and power
pool price
Feed-In Tariff differentiated by NRE type has been in place since 2002
Duration: either 15 or 20 years starting from the date of FIT subsidization
Total of 345MW (248 sites) has been subsidized as of Dec., 2008
Renewable Portfolio Standards (RPS)
A portion of power production or sales to be generated by NREs
A PowerGen meets the obligation by choosing one of options, either 1)
generation by itself, 2) purchase contract with NRE generators, or 3)purchasing RECs in the secondary market
Renewable Portfolio Agreement (RPA)has been implemented for public
energy organizations in expectation of RPS implementation in 2012
Initial RPS is anticipated to be 1.7-2%
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Power Source Eligible Facilities CategoryFIT(/ h)
NoteFixed Variable
Wind 10 or larger - 107.29 -Reduction
Rate: 2%
Hydro 5 or smaller
Commerce1 or larger 86.04 SMP+15
1 or smaller 94.64 SMP+20
Others1 or larger 66.18 SMP+ 5
1 or smaller 72.80 SMP+10CMW (incl. RDF) 20 or smaller - - SMP+ 5
Fossil Fuel
content:
Less
than30%
Bio-
Energy
LFG 50 or smaller20 or larger 68.07 SMP+ 5
Less than 20 74.99 SMP+10
Biogas 50 or smaller150 or larger 72.73 SMP+10
Less than150 85.71 SMP+15
Biomass 50 or smaller Ligneous biomass 68.99 SMP+ 5
Marine
Energy
Tidal
Power50 or larger
tidal range:
8.5m or higher
With dike 62.81 -
No dike 76.63 -
tidal range:
8.5m or lower
With dike 75.59 -
No dike 90.50 -
Fuel Cells 200 or largerBiogas-based 227.49 - Reduction
Rate: 3%Other fuel-based 274.06 -
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Period Duration30kW orsmaller
30kW~
200kW200kW~
1MW1MW ~
3MW3MW orlarger
~ 2008. 9.30 15 years 711.25 677.38
2008. 10.1~
2009. 12.31
15 years 646.96 620.41 590.87 561.33 472.70
20 years 589.64 562.84 536.04 509.24 428.83
2011.1.1
~12.31
Open
Area
15 years 566.95 541.42 510.77 485.23 408.62
20 years 514.34 491.17 463.37 440.20 370.70
Using
Structure
15 years 606.64 579.32 546.52 - -
20 years 550.34 525.55 495.81 - -
2011.1.1~
12.31
OpenArea
15 years 484.52 462.69 436.50 414.68 349.2020 years 439.56 419.76 396.00 376.20 316.80
Using
Structure
15 years 532.97 508.96 480.15 - -
20 years 483.52 461.74 435.60 - -
20
\/kWh)
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262.3 billion W of subsidies for sites of 1,308 with capacity of 621MW (2009)
Solar PVs take the largest share (91.5% in 2009)
2002 2003 2004 2005 2006 2007 2008 2009 Total
Sites 28 8 5 23 57 142 754 291 1,308
capacity(kW) 50,703 18,618 47,140 107,618 20,007 102,178 276,934 229,619 852,822
generation(MWh) 159,942 269,771 309,856 390,171 489,936 854,786 1,185,370 1,502,991 5,162,825
subsidies(109 W) 3.3 5.6 5.1 7.5 10 26.8 119.5 262.7 440.2
Mini-hydro LFG Wind Solar PVs Fuel Cells Biogas Total
Capa.(kW, accum) 78,223 82,338 314,600 347,153 20,050 2,711 852,822
generation(MWh) 192,284 374,740 446,158 420,164 61,698 5,860 1,502,991
subsidies(106 W) 2,213 2,099 6,834 240,401 11,036 59 262,652
Source: KEMCO, 2010
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RPS was a policy option to be introduced in 2nd Basic Plan forNRE Development & Deployment (Dec. 2003)
Two national projects were conducted respectively by KEEI
and KERI (2005, 2007)
RPS introduction was publicly announced in Green EnergyIndustry Development Strategy (Sep. 2008) and the 3rd Basic
Plan for NRE Development and Deployment (Dec. 2008)
Revised bill of NRE promotional law was submitted (Dec.
2009) and passed in National Assembly (2010)Workshop was held for eligible entities and RPS mandated
organizations (Jun, 2009)
Public Hearing was held with stakeholders (Mar, 2010)
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Mandatory volume
and Targets
Institutionalization
and system design
Relevance and integration to Energy-related national plansNational Energy Basic Plan, NRE Basic Plan, ElecPower Basic Plan
Strengthened role of Power sector in promoting NREsIncreasing NRE share and early reaching Grid Parity
NRE market development for Green Growth, green tech.Promotion of NRE transactions through RECs trading, etc.
Maximum utilization of domestic energy resourcesDevelopment of NREs of good potential, ie, offshore wind etc. biomass
General principles and standards of RPS mechanismEligible power source, RECs, cost-transfer, etc.
Staus of domestic power industry and technological levelMandated entities and independent and separate market for solar PVs
Contribution to domestic NRE industry and technologyPromoting strategic tehcnologies such as solar PVs, wind, fuel cells
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GenCos whose power generation capacity: larger than 500MW 6 major GenCos + PoscoPower, GS EPS, K-Power, GS Power, Mayar
Yulchon, Hyudai Daisan
Korea Water Resources Corp. and Korea District Heat Corp.
GenCos
Independent
GenCos
Public
Corp.
Law Presidential decree/rules
GenCos
IndependentGenCos
PublicCorp.
Eligible
Entities
Applied to business entities whose capacities are larger than a specificlevel (500MW) and/or have specific business type (public utilities: CHP, etc)
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Total mandatory volume
Solar PVs 200MW a year to be allocated up until 2017
From 2017 on to compete with other NREs
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
RPS(%) 2.0 2.5 3.0 3.5 4.0 5.0 6.0 7.0 8.0 9.0 10.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
New(MW) 200 220 240 260 280 - - - - - -
Accum(MW) 200 420 660 920 1,200 1,200 1,200 1,200 1,200 1,200 1,200
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Eligible Power Sources and Technologies Solar PVs, Wind, Hydro, Fuel Cell, Marine Energy, Geothermal, Waste
Incineration Conversion Energy, Municipal waste solid fuel combusted or
converted energy
IGCC : not decided (Up to 10% of mandatory volume to be accepted??)
Weighted RECs : 0.25 non-tradable RECs to be issued
By-product Gas: excluded
Flexible Mechanism: borrowing and lending
Up to 20% of mandatory volume is eligible for borrowing
30% to be permitted within 3 year after RPS launching
Penalties for failing to meet the obligation
Payment of 1.5 times as high as RECs for corresponding eligible power
source or technology
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Weight Eligible Power Sources or Tech.
NREsInGeneral
Group I 0.5 WTE, LFG WTE, LFG, IGCC
Group II 1.0Hydro, Wind(onshore),
Bio-E, Geothermal,Tidal power I
Hydro, Wind(onshore),Bio-E, Geothermal
Group III 1.5Wind(offshore)Tidal power II
Other marine energyTidal power I
Group IV 2.0 Fuel CellWind(offshore)
Tidal power II, othermarine E, Fuel Cell
SolarPVs
Group I 1.0 Open site (30kW or larger) Open site
Group II 1.2 Open site (30kW or smaller) Building
Group III 1.5 Building
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Note: tidal power I(sea dike length up to 10km), tidal power II (sea dike of 10km or longer)
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Jun 2010: presidential decree and rules to be completed March 30 : Public Hearing
June 30: presidential decree and rules
August 31: public notices or bulletins to be written
October 31, 2010: RPS RECs trading system to be established RPS operation rules and RPS integrated operating system to be
established
2011: RPS simulation exercise and RPS trading system
modified and adjusted
Issuing mock RECs and trading among eligible public as well as private
entities
Jan 1, 2012: Launching RPS
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Increasing role of NREs in response to climate change, energysecurity, equity problems
NRE as a green growth engine leads to domestic & export industry with
indigenous technologies
Survival strategy to beat energy security issue and accelerating
climate change caused by overuse of fossil-fuels Energy paradigm shift into a sustainable energy system based on
renewable energies as clean and local energy source
Governments undivided commitment and implementation of
New & Renewable Energy Basic Plan Consumers: Million Green Homes, mandatory use in government, public
buildings, green marketing
Suppliers: FIT, RPA. RPS, RFS and other effective policy tools (RHI)
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Kyung-Jin Boo, PhD. Senior Fellow
Korea Energy Economics Institute (KEEI)
Phone: 82-31-420-2139 (Office)
82-11-9739-5410 (Cellular)
E-Mail: kjboo@keei.re.kr