Korea Update: Ministry of Trade, Industry and Energy Issues Policy Goals for Adoption of Renewable Energy

On January 5, 2022, the Ministry of Trade, Industry and Energy (“MoTIE”) announced that adoption of renewable energy in 2021 was recorded at 4.8 GW, and issued policy goals for further adoption of renewable energy in view of South Korea’s carbon-neutral goals.

The 2021 adoption of renewable energy, totaling 4.8 GW, was over the initial goal of 4.6 GW, marking the fourth consecutive year in which actual adoption exceeded the yearly goal. Adoption by renewable energy source was recorded at 4.4 GW solar, 0.1 GW wind, and 0.3 GW other sources (e.g. biofuels).

Cumulative adoption of renewable energy has reached 29 GW (21 GW solar, 1.7 GW wind) as of the end of 2021. In particular, adoption of solar energy was 15.6 GW over the past four years since the establishment of the “Renewable Energy 3020 Plan,” which is over 2.4 times the cumulative adoption as of the end of 2017. The proportion of renewable energy in industrial energy production has reached 6.5% as of October 2021, more than a twofold increase compared to the end of 2017.

However, due to a variety of factors, adoption in 2021 has slowed in comparison to 2020. In the case of solar, strengthened siting regulations due to safety concerns has reduced new solar installations in mountainous areas (0.8 GW in 2021, compared to 1.2 GW in 2020). Other factors include strengthened distancing regulations and decreased economic feasibility. In the case of wind, complex approval processes and resident opposition has delayed new projects. However, an increased REC value has resulted in a significant expansion in new projects, and adoption is expected to pick up speed in the mid to long term.

The MoTIE issued the following policy goals for further adoption of renewable energy;

(1) Securing economic feasibility for new installations, through means such as increasing the mandatory RPS ratio from 10% to 12.5%, increasing fixed-price bids, and offering incentives linked to marine wind farms.

(2) Improving regulations and procedures concerning renewable energy, through means such as enacting the “Special Act on Wind Energy”, improving distancing regulations, and providing analyses on wind farm siting.

(3) Improving residents’ acceptance of renewable energy, through means such as increasing incentives and resident participation, as well as referring to model cases of resident participation in renewable energy projects.

By Yulchon, Korea, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact korea@transatlanticlaw.com 

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