Ministry of Industry introduces Korean RE100… Final confirmation of renewable energy power purchase plan
Industry “Positive selective purchasing by companies… Needs market and system reflecting environmental costs”
[이투뉴스] Starting this year, electricity produced by renewable energy can be purchased and used in Korea. In particular, the government plans to induce companies to purchase renewable energy power by preparing a plan to implement RE100 (100% renewable energy) tailored to the domestic market.
The Ministry of Trade, Industry and Energy announced on the 5th that it will introduce a’Korean RE100 system’ that allows electricity consumers such as companies to choose renewable energy and use it.
The Ministry of Industry announced a plan to support the implementation of the domestic RE100 through the Green New Deal policy meeting last year. Since then, it has built infrastructure for implementing the system, such as overhauling laws and building systems. The Korean version of the RE100, which will be applied from this year, is characterized by a large number of doors.
First of all, regardless of the level of electricity consumption, both industrial and general electricity consumers who want to purchase renewable energy in Korea can participate after registering with the Korea Energy Agency. Compared to the global RE100 campaign recommending participation for companies with annual electricity consumption of 100 GWh or more, the number of companies that can participate has increased.
The energy sources that can be recognized for the use of renewable energy are solar, wind, hydro, marine energy, geothermal energy, and bioenergy. It is the same as the global RE100 campaign standard.
Companies can procure renewable energy through green premium system, third-party PPA, REC (renewable energy supply certificate) purchase, and self-generation. Equity investment that directly participates in the renewable energy power generation business requires a third party PPA or REC purchase separately from the power plant.
The domestic system can participate without the declaration of 100% use of renewable energy. The Ministry of Industry is planning to recommend the use of 100% renewable energy by 2050, which is the same as the global RE100 campaign standard. By 2050, the intermediate goal is to leave the participants’ autonomy.
The Korea Energy Agency plans to issue a’renewable energy use confirmation’ after confirming the use of renewable energy submitted by companies. Participants who have received the confirmation can use the confirmation document for global RE100 implementation.
Incentives are also provided, such as being recognized as a result of reducing greenhouse gas emissions when using renewable energy. Currently, the Ministry of Environment is revising the relevant guidelines for specific energy sources, reduction means and methods. The minimum standard for renewable energy use to support incentives such as labeling is set at 20%, and various support plans are also planned to promote continuous use of renewable energy.
The means of procuring renewable energy prepared to implement the RE100 are ▶ third party PPA ▶ green premium ▶ purchase of REC. The government passed the revision bill of the Enforcement Decree of the Electricity Business Act, with the introduction of a third-party PPA as the main point, through a state council meeting on the 5th. The current Electricity Business Act is based on electricity market transactions, but exceptional transactions outside the market are entrusted to the enforcement decree.
In Article 19, Paragraph 1, No. 3 of the amendment to the Enforcement Decree, a new provision is made stating that “It is possible to enter into a supply contract with KEPCO and electricity consumers for electricity produced by renewable energy generators (more than 1MW).” Through this, a power purchase contract is allowed between renewable energy generators, KEPCO, and electricity consumers.
The Ministry of Industry expects that the introduction of a third-party PPA will contribute to ▶ laying the foundation for RE100 implementation by domestic companies ▶ spreading renewable energy supply through expanding renewable energy transactions ▶ expanding electricity consumers’ options. The Ministry of Industry and KEPCO are planning to introduce a third-party PPA from the first half of this year through follow-up procedures such as enactment of notice and revision of KEPCO’s terms and conditions.
Green premium is a system in which electricity consumers pay a premium (extra charge) from KEPCO and purchase renewable energy. From the 5th, a bid announcement will be held for one month through the KEPCO and the Korea Energy Agency’s New and Renewable Energy Center.
The green rate system is evaluated as the easiest way for electricity consumers to procure renewable energy. The premium paid by electricity consumers is expected to contribute to expanding the supply of renewable energy by contributing to the Korea Energy Agency and utilizing it for renewable energy investment projects.
Green premium sales volume is set as the amount of renewable energy generation by year under the New Renewable Energy Supply Mandatory (RPS) and Power Generation Difference Support System (FIT). Participants who wish to purchase a green premium can bid the desired generation amount and purchase price per year this year. The amount of power generated by the successful bid is distributed monthly to each participant and purchased at the successful bid price.
Detailed information, such as specific participation procedures and methods, can be confirmed through the bidding announcements of KEPCO and the Korea Energy Agency. If there is a residual quantity as a result of the bidding, additional bidding will be made around June.
REC, which was only available to those who are obligated to supply RPS, will also be able to purchase electricity consumers such as companies from this year. Electricity consumers can be recognized for use of renewable energy through purchased RECs. The Korea Energy Agency is building a dedicated REC trading platform for RE100 implementation, separate from the RPS market. The REC trading platform is scheduled to be implemented after a pilot project in the first quarter. The announcement of the pilot project will be posted on the website of the Korea Energy Agency’s New and Renewable Energy Center starting on the 11th.
An official from the Ministry of Industry said, “The situation is that companies’ use of renewable energy is no longer an option, but a necessity. The Korean RE100 system will further strengthen the global competitiveness of domestic companies and accelerate energy conversion.”
In the renewable energy industry, it was evaluated that it was meaningful that it provided an opportunity for electricity consumers to choose and purchase renewable energy. However, he added that electricity sellers and buyers should be able to freely sign renewable energy PPA contracts without KEPCO intermediary in the sense of guaranteeing consumer choice.
In particular, he pointed out that there is a need to establish a market structure that properly reflects environmental costs, such as strengthening regulations on the emission trading system for coal and gas power plants that emit excessive greenhouse gases, and strengthening taxation on fossil fuels.
Kwon Kyung-rak, director of Climate Solutions, said, “It is difficult for the Korean RE100 system to succeed only with the good will and voluntary participation of consumers.” I do” he said.
Reporter Jin Gyeong-nam [email protected]
Copyright © ::: Global Green Growth Media-E2News Unauthorized reproduction and redistribution prohibited