KoreaToday Korea Races to Reach the Sun
By Ravi Krishnaswamy
Director, Energy & Power Systems, Frost & Sullivan Asia Pacific
Obsession with high technology, strong experience in electronics manufacturing, limited domestic energy resources, and high oil prices all seem to be a perfect platform for a country like South Korea to embrace solar power.
That is exactly what the country did when it announced an ambitious plan to boost clean energy technologies & generation by 2030, through a series of policy measures and investment decisions.
Apart from investing 11.5 trillion Won for R&D in green energy technologies by 2030, the government is instituting Renewable Energy Standard (RES) mandating utilities to obtain 3 percent of their electricity by 2012 and 10 percent by 2020, from clean & new energy sources like solar, and wind etc.
No doubt this is very significant and forward looking, but is it enough? And did it come a bit too late for the Korean solar industry to make a global impact in a market dominated by giants Germany, United States and Japan?
True, South Korea is fast becoming an exciting next big destination for global solar majors. Conergy of Germany recently commissioned Asia's biggest solar photo voltaic (PV) power plant with 20 MW installed capacity in Sinan. US companies SunPower and Solar Power Inc. attributed their company's top-line growth this year to strong demand for solar panels from Korea.
Eurus Energy Holdings of Japan announced its entry into the Korean market by installing and operating a 1 MW solar PV plant in North Jeolla province using Mitsubishi Electric's solar panels.
There have also been developments involving Korean companies setting sights overseas. LG Electronics announced last week that it is picking up a 75 percent stake in Conergy's advanced solar module plant in
Germany.
But there are several challenges the domestic solar industry and market in Korea has to overcome in order to establish the country as a strong global player.
Korean companies have still not established themselves across the entire value chain of solar industry in an integrated manner.
Their presence is very discrete and opportunistic.
Korean companies should identify and focus on a few niches in different parts of the value chain: The manufacturing prowess of Germany, Japan & China ― China is becoming a dominant player in the global polysilicon manufacture; the large domestic markets in Germany, Japan, Spain, and the United States ― Germany has more than 50 percent of global installed solar power capacity.
Entrepreneurship and innovation are important to the success of any emerging technology. The government, industry and financial community should support new ideas and encourage startups working on various solar technologies.
While the large conglomerates can focus on bigger projects and volume manufacturing, the start-ups can focus on niche technologies and applications.
One of the key attributes of Germany's success in the field of renewable energy in general and solar PV in particular has been the close cooperation between its industry and research institutes.
Fraunhofer Institute for Solar Energy Systems (ISE), already one of the top research centers globally in this field, has helped set up a second one called Fraunhofer Center for Silicon Photovoltaics (CSP) in Halle, former East Germany. Halle is also home to Fraunhofer Institute for Mechanics of Materials (IWM), which plays a major role in the research & development of solar materials and applications.
South Korea should aim to create world-class independent research centers, aiming to compliment corporate research activities.
The South Korean domestic market is focused on developing large centralized solar power plants and distributed off grid solar PV installations. Encouraging grid connected rooftop solar and building integrated photo voltaic applications, will provide a major boost to the demand.
Solar Energy storage is an opportunity which South Korea can aspire to capitalize on owing to its strong base of global players in the batteries market, including Samsung SDI.
For example, in Europe, Saft, Conergy and Tenesol recently launched SOLION partnership aimed at demonstrating the technology, benefits and effectiveness of storing solar energy generated from decentralized on-grid and residential PV systems.
Thus, South Korea, being a late entrant into the global solar PV market will face some huge challenges, but also have niche opportunities, provided the government & industry work together on a coherent industry growth strategy.