Kyung-Jin Boo - Korea Experience

8/6/2019 Kyung-Jin Boo - Korea Experience

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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: [email protected]

Kyung-Jin Boo - Korea Experience

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