Energy sector gets financial boost

To invigorate the local energy industry, public and private institutions in Korea will continue to join efforts in 2017. Their latest endeavor came Wednesday with the government announcing a blueprint for financial investment in the sector in 2017.

The Ministry of Trade, Industry and Energy met to discuss the future trajectory of the Korean energy industry and estimated that 13.8 billion won ($11.4 million) will be spent this year to finance new energy-related projects.

While the amount is 25 percent more than the investments of 2016, the plan is notable for the commitment made by the private sector, mainly financial institutions and private companies.

The financial institutions will invest 4.1 billion won, up 1.4 billion compared to 2016, the ministry said. Korean corporations will throw in 3.2 billion won, 1.5 billion won more than what they spent in 2016.

“The government will continue to work on systematic reformation and incentivize projects to improve working conditions of the local companies,” said the ministry. “Capital inflow will also kick into high gear [this year].”

The government will herald the effort and focus on communicating with major players in the industry. It will also review any regulatory obstacles in order to streamline technological development related to energy.

As for the local companies, they will boost the reliability of their products to meet rising market demand. For example, companies that produce energy storage systems will expand their warranty period from two years to three.

To support their efforts, financial institutions will provide more financing. Their main target is to lower the barriers to entry and financial burdens, which put heavy restrictions on the minor players in the industry.

One of the projects announced on Wednesday by the ministry was the joint venture between Korea Land & Housing Corporation, a state-run land developer, and LG Electronics.

Together, they will equip 2,000 apartments this year with an energy storage system linked with Internet of Things infrastructure, allowing individuals to control their energy usage more effectively. They expect this will slash the utility bills related to energy, although no estimated figures were given.

“Users will be able to monitor the amount of energy they use and control their usage wirelessly,” explained the ministry. “We also expect the energy storage system will help them save on energy bill.”

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]