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| A floating solar farm in Gunsan, North Jeolla Province / Yonhap |
By Nam Hyun-woo
Korean firms seeking to pursue RE100, a global campaign of transitioning to 100 percent renewable power, will be able to purchase electricity generated from renewable sources from solar farms and other eco-friendly power plants, the government announced Tuesday.
According to the Ministry of Trade, Industry and Energy, the Cabinet Meeting has passed a revision to the Enforcement Decree of the Electric Utility Act. The revision is aimed at allowing power purchase agreement (PPA) between renewable power plants, consumers and state-run power distributor Korea Electric Power Corp (KEPCO).
PPA is regarded as one of the most important tasks for expanding renewable energy use in Korea, where KEPCO collects electricity generated by its subsidiaries and independent power companies, and sells it as a single source. Due to this system, companies pursuing RE100 have been facing obstacles in because they cannot separate electricity generated from renewable sources.
RE100 campaign is backed by more than 280 big name companies, including Apple, Google and BMW, and expected to expand as those firms demand their suppliers to join the move. In Korea, six affiliates of SK Group were acknowledged as RE100 member on the Climate Group, which leads the campaign, but the companies have been using 100 percent renewable energy at their overseas plants and offices.
The Korean law regulates all electricity produced here should be distributed on KEPCO's grid, prohibiting direct power purchase between consumers and power plants. This scheme will remain, but the revision allows renewable power companies whose generation capacity exceeds 1 megawatt to sign a trilateral supply agreement with KEPCO and the consumer, so KEPCO can relay the power transaction.
The ministry said signing of PPAs will be available within the first half of this year, and this will help more Korean companies to expand renewable energy use and pursue RE100. The Korean government is seeking to achieve carbon neutrality by 2050.
Civic groups advocating Korea's PPA welcomed the revision, but tasks are remaining to see the desired outcomes.
"Though it is not a perfect form of PPA, it is a meaningful improvement which will provide options to electricity consumers," Solutions for Our Climate said in a statement. "To provide better options for consumers, the system should allow consumers to freely and directly sign PPAs with renewable power firms. Through this, power firms can secure stable profits through long-term agreements and consumers also can prepare themselves from a potential electricity rate hike from KEPCO."
The organization added that "enough environmental costs for fossil fuels and LNG" are required in order to encourage more firms to join RE100, in order to convince firms that renewable power will be cheaper than KEPCO-distributed electricity in the near future.
Along with PPA, the government introduced its Green Premium program, in which consumers are able to purchase renewable power from KEPCO on additional charge, and allowed corporates to purchase renewable energy credits (RECs). So far, power companies following renewable portfolio standard (RPS) were only able to purchase RECs. RPS refers to a regulation that requires power firms to generate a certain amount of electricity from renewable sources.
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