Gov’t pledges spending on new forms of clean energy

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Gov’t pledges spending on new forms of clean energy

The government announced Tuesday that it will invest some 42 trillion won ($36.3 billion) through 2020 to nurture new energy industries and ease regulations on the renewable energy sector.

The government said the domestic energy market will grow by some 400 percent to reach 16.6 trillion won and create 124,000 new jobs.

According to the Ministry of Trade, Industry and Energy, the government will first spend 30 trillion won to construct a number of renewable energy power plants across the nation that will have capacity of 13 million kilowatts, which is the same amount generated by 26 local coal-fired power plants.

The government will increase the country’s renewable portfolio standard (RPS) from 4.5 percent to 7 percent by 2020. That would signify that 7 percent of total electricity generated in the nation will be from renewable sources such as wind and solar. The government’s plan is to have the figure go up to 20.6 percent by 2029.

“The new energy industry is growing rapidly and becoming a major industry that many countries are getting interested in,” said Trade Minister Joo Hyung-hwan on Tuesday. “Countries like the United States and China are investing tremendous amounts of money in this industry and Korea shouldn’t fall behind. We will try to help the local energy industry grow not only in this country but also in foreign markets by easing regulations and by expanding financial support.”

The government will allow companies operating renewable energy power plants for their businesses to sell surplus electricity to others. Currently, a regulation allows them to sell only 50 percent of the surplus, but it plans to change that regulation.

The capacity for companies operating their own solar power plants will be limited to less than 10 megawatts, which is enough to supply energy to some 3,000 households. “Big companies around the world such as Google, General Motors and Facebook have already adopted the idea,” said an official at the Trade Ministry.

The Trade Ministry’s plan is to gradually open the energy sector, which is monopolized by state-run companies as the Korea Electric Power Corporation (Kepco) and Korea Gas.

The government announced measures to overhaul the energy sector in hopes of reducing the role of public corporations and bringing more efficiency last month.

Government tried to reform these public energy companies but the attempt had little impact on curbing their growing debts, which have been blamed on aggressive expansion in overseas energy investments. Korea Gas Corporation’s debt-to-capital ratio jumped from 228 percent in 2007 to 321 percent in 2015.

The government said it will have Kepco focus on finding new energy sources and invest in large power plants, while having the other power companies to focus on different sectors such as renewable energy sources.


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