Yoon tries canceling Moon's renewable energy policies

Economy

Published: 03 Nov. 2022, 15:53 Updated: 03 Nov. 2022, 19:21

Yoon tries canceling Moon's renewable energy policies

A solar farm in South Gyeongsang. the government has announced of lowering the ratio of solar energy while increeasing wind energy contribution. [YONHAP]

The Yoon Suk-yeol government is altering the Moon Jae-in administration’s renewable energy policy by increasing the contribution of wind power while lowering that of solar.

The move follows an investigation of companies that allegedly made huge profits out of the Moon government's solar energy subsidies.

According to the Ministry of Trade, Industry and Energy on Thursday, solar energy, which accounts for 87.13 percent of renewable energy sources currently, will be lowered to 60 percent by 2030. Wind power will be increased from 13 percent currently to 40 percent during the same period.

The ministry said the change will make the goals more practical and cost efficient.

The ministry plans to tighten renewable energy licensing for projects, especially small solar farms with capacity of 1 megawatt or less. Many such licenses were issued by the previous government,

Also the government will crack down fraud in past projects designed to get larger subsidies or loans.

Under the Moon government, the budget for renewable energy doubled from 796.3 billion won in 2017 to over 1.6 trillion won in 2021.

New renewable energy sources between 2012 and 2016 grew by 5.9 gigawatts. Between 2017 and 2022 they grew 18.3 gigawatts.

Renewable energy was the source of 6.3 percent of all Korean energy in 2021 compared to 3.2 percent in 2017.

The ministry noted that many solar energy plants are small farms with a production capacity of 1 megawatt or less. In fact, they account for 80 percent of all solar energy production.

Government subsidies have paid for as much as 80 percent of all costs of installing solar panels. Some people entering the business overstated costs or lied to get big loans at low interest rates.

Damage to the environment by reckless installing of solar panels is also an issue.

The Yoon government also says its predecessor licensed wind farms recklessly, resulting in conflicts with fish farms.

Licenses for wind power turbines in 2017 were only for 0.4 gigawatts of power, which surged to 8.2 gigawatts in 2021.

Another surge has come in imports of solar cells and modules.

Imported solar cells now accounts for 65 percent of the local market from 48 percent in 2018. Imports' share of the module market share increased to 34 percent from 27 percent.

As a result, Korean companies are suffering. Woongjin Energy is under a court restructuring process. OCI folded its solar polysilicon business in Korea and so did Hanwha. LG Electronics stopped its solar cell and module production.

The ministry added that it will be lowering the mandatory renewable portfolio standards (RPS) for 24 power companies with power capacity exceeding 500 megawatts.

A new ratio will be announced later this year and applied in 2023.

Last December, the Moon government raised the RPS -- how much energy each company must get from renewables -- from 9 percent in 2021 to 10 percent for this year.

The RPS was to be raised to 25 percent by 2026.

In August, the Yoon government lowered Moon’s targeted goal of renewable energy in the energy mix from 30 percent by 2030 to 21.6 percent.

The Yoon government is keeping the carbon neutrality target of 2050, but largely through more use of nuclear energy.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]