The government has launched a renewable energy trading platform that induces companies to convert energy to achieve ‘2050 carbon neutrality (Net Zero)’. ‘RE100′, a global campaign that converts 100% of electricity used to renewable energy, will be introduced according to the domestic situation, but it is evaluated that the threshold has been lowered because there is no electricity usage standard and there is no need for a burdensome’renewable energy 100% declaration’.
It is worth noting that it broke the electricity supply system that KEPCO had monopolized, allowing electricity consumers to selectively purchase renewable energy. There are also voices that the Electricity Business Act should be revised so that electricity purchase contracts between electricity sellers and buyers can be made without KEPCO’s intermediary to revitalize the system. Some point out that environmental costs for coal power plants that emit greenhouse gases should also be set high.
The Ministry of Trade, Industry and Energy announced on the 5th that it will introduce the’Korean RE100 (K-RE100)’ system in earnest this year, in which electricity consumers such as companies can purchase and use renewable energy.
“With 100% power and renewable energy”… Open the way for companies to participate
RE100 is a global campaign that converts 100% of corporate power to renewable energy, and currently more than 280 companies around the world are participating.
Companies that want to participate in RE100 are increasing in Korea. Recently, six SK Group companies (SK, SK Telecom, SK Hynix, SKC, SK Materials, and SK Siltron) joined RE100 for the first time as a Korean company. (☞SK Group 6 companies, listed in RE100 members list) SK Corp. promised to convert 100% of the power used to renewable energy by 2030 and the remaining 5 companies by 2050.
The global RE100 campaign is only available to companies with annual electricity usage of 100 gigawatt hours (GWh) or more. In other words, companies that do not meet the standards have been unable to participate in RE100. Accordingly, the government expanded the choice of companies wishing to participate in RE100 through the introduction of K-RE100. Regardless of the level of electricity use, participation was made possible through registration with the Korea Energy Agency.
It is also different from the global campaign that participation is possible without a declaration of 100% renewable energy use, but the Ministry of Industry recommended that participating companies use 100% renewable energy in 2050, which is the same as the global campaign standard. By 2050, the interim goal was left to participants’ autonomy. The energy sources that can be recognized for the use of renewable energy are solar, wind, hydro, marine energy, geothermal energy, and bio energy, which are also the same as global standards.
More than half of the total energy used by enterprises
The reason why the government wants to convert corporate power to renewable energy is simple. This is because industrial power has a very high proportion of total power.
According to KEPCO, as of October last year, the industrial power sales amounted to 22,000,623 GWh, which is 58% of the total sales volume (39,65 GWh). During the same period, residential electricity sales were only 5,766 GWh. The electricity used by SK Group’s six affiliates participating in the global RE100 campaign is 31 terawatts (TW) per year, which is 5% of the domestic electricity consumption.
An implementation plan for promoting K-RE100 was also presented. The most noticeable thing is the’green premium’. It is a source of money that electricity consumers who want to purchase renewable energy production power pay separately from the electricity bill. If a’renewable energy use confirmation’ corresponding to the amount paid is issued from the Korea Energy Agency, it can also be used for RE100 certification.
According to KEPCO, this year’s green premium sales volume is set at 17,827 GWh, and the lower limit for bidding is set at 10 won per kilowatt-hour (kWh). The green premium will be paid monthly, and the renewable energy use confirmation will be issued quarterly. The green premium paid in this way is used as a resource for renewable energy investment projects promoted by the Korea Energy Agency.
“A free PPA should be possible, not a’third party'”
You can also participate in K-RE100 through a third-party power purchase contract (PPA), which will be introduced in the first half of the year. It is a system that enables power purchase between renewable energy generators and KEPCO and electricity consumers. Electricity supply contracts with KEPCO and electricity consumers are possible only for the amount of power produced in excess of 1 megawatt (MW).
However, it was also pointed out that in the case of a third-party PPA, because KEPCO intervenes as an intermediary, consumers’ choices may be limited. If KEPCO, a power monopoly distributor, brokers the power purchase process, there may be a conflict of interest. Last year, the Ministry of Industry’s national supervision also pointed out the need for a free PPA between consumers.
To this end, it is necessary to pass the amendment to the Electricity Business Act, which is currently pending at the National Assembly. This amendment regulates the renewable energy power supply business as a new business such as electric vehicle charging, and is a plan to allow direct PPA between power generation companies and companies. Renewable energy generators can secure stable profits through long-term fixed contracts, and buyers can prepare for the risk of rising electricity rates from KEPCO.
Some voices say that environmental costs for greenhouse gas emission sources must be sufficiently charged to activate PPA. In a commentary on the day, environmental group Climate Solutions said, “To expand the number of consumers participating in K-RE100, we must provide confidence that renewable energy costs may be lower than KEPCO’s electricity rates in the near future.” It is necessary to create a market structure in which environmental costs are properly reflected in the unit cost of thermal power generation by strengthening the taxation on fossil fuels.”
Global attention to the possibility of the Korean carbon neutral transition
The Korean RE100 platform is attracting attention from overseas as well. It is a view that, while the government has introduced the Green New Deal policy and measures to implement carbon neutrality one after another, the flow and direction of energy conversion policies abroad are generally highly evaluated, but more implementation measures are needed to support them.
Related Articles
Introduction of’Korean RE100’… Now you can buy and sell renewable energy
6 SK Group companies are on the list of RE100 members
8 SK Group companies to join’RE100′ for the first time in Korea
RE100 support plan confirmed… Linked with GHG reduction performance
The Climate Group of the UK, which leads the global RE100 campaign, said, “Korea, the world’s seventh-largest carbon dioxide (CO2) emitter, has fully implemented energy policies to keep its promise to achieve carbon neutrality by 2050. “As an export-led economy, the Korean government must respond to the trend of RE100, which requires suppliers to switch to renewable energy in order to remain competitive.”
Jin Woo-sam, chairman of the Korean Society for New and Renewable Energy, told the Climate Group, “It is true that companies have been difficult to procure renewable energy in Korea so far.” It will greatly improve, and the participation of six SK Group companies in the global RE100 campaign will be a big signal for the renewable energy market and government policy.