South Korea - Country Commercial Guide
Energy - Carbon Neutrality Initiatives

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-08-02

ITA CODE: PR REQ

Overview

South Korea is the 14th country to legislate carbon neutrality by 2050 with an interim target of 40% emissions reduction by 2030 compared to 2018 levels. South Korea retains industries that are considered highly energy-intensive and imports over 90 percent of energy resources given that the country lacks sufficient domestic energy resources. In 2021, 576,316 gigawatt hours of electricity power was generated in South Korea, with 18 percent and 15.3 percent increase in renewable (43,085 GWh) and gas (168,262 GWh) power generation. Although there was a significant decrease in coal power generation, coal still represents approximately 34 percent of the total electricity generation. Approximately 27 percent of electricity is generated from nuclear power with the Yoon administration targeting at least 30% by 2030. South Korea’s CO2 emissions from fuel combustion was 570.74 million tons (Mt) in 2020, compared to 432 Mt in 2000 (International Energy Agency (IEA) CO2 Emissions Statistics).

South Korea released their 9th Basic Plan for Long-term Electricity Supply and Demand 2020-2034 (9th Basic Plan) in December 2020. The plan is released every two to four years by the Ministry of Trade, Industry and Energy, and presents a roadmap for South Korea’s power industry. The latest plan reflects measures to follow South Korea’s pledge to go carbon neutral by 2050, targeting increases in gas and renewables to offset coal and nuclear energy. Based on 9th Plan, South Korea is moving toward a cleaner future with renewable energy making up almost 34 percent of the total energy capacity by 2030, a significant increase compared to today’s 15 percent. Solar and wind will drive most renewable capacity additions with offshore wind playing a major role, accounting for nearly 40% of South Korea’s wind energy production in the plan. However, the Yoon administration will update the next Basic Plan for Long-term Electricity Supply and Demand later this year to reflect an increase in nuclear power generation capacity and a less aggressive renewable generation target.

Power Generation Capacity (GW) Ratio based on 9th Basic Plan for Long-term Electricity Supply and Demand 2020 -2034

Power Generation Capacity (GW) Ratio based on 9th Basic Plan for Long-term Electricity Supply and Demand 2020 -2034
Power Generation Capacity (GW) Ratio based on 9th Basic Plan for Long-term Electricity Supply and Demand 2020 -2034

(Source: Ministry of Trade, Industry, and Energy)

Table: New and Renewable Energy Supply (TOE thousands)

2016

2017

2018

2019

2020

6,684

8,481

10,097

10,584

12,362

 

Source: Korea Energy Agency (KEA), Unit: Ton of Oil Equivalent (TOE), *Note: as of 4Q 2019, Korea does not recognize and tally non-recyclable industrial waste, such as by-product gases in steelwork, as new and renewable energy.

In terms of deployment, the supply of new and renewable energy was 6.6 million TOE for 2016 and 12.3 million TOE in 2020 respectively, with a 2016-2020 CAGR (Compound Annual Growth Rate) of 16.9 percent.   

South Korea has taken measures to expand the deployment of new and renewable energy. State-owned power generation companies (GENCOs) and independent power producers (IPPs) that generate over 500 MW are required to include a certain percentage of renewable energy in their production portfolio.

Renewable Portfolio Standard (RPS) ratio (%)

Table: Renewable Portfolio Standard (RPS) ratio (%)

2016

2017

2018

2019

2020

2021

2022

2023~

2024~

2025~

2026~

3.5%

4%

5%

6%

7%

9%

12.5%

14.5%

17%

20.5%

25%

Source: Korea Energy Agency (KEA)

As of 2022, there are 23 companies that are applicable to the Renewable Portfolio Standard (RPS) ratio (%) mandate and are thereby required to include a certain percentage of new and renewable energy in their power production portfolio.

Korea Hydro and Nuclear Power (KHNP).

  • Korea Southern Power (KOSPO).
  • Korea Midland Power (KOMIPO).
  • Korea Western Power (KOWEPO).
  • Korea East-West Power (EWP).
  • Korea South-East Power (KOEN, formerly KOSEP).
  • Korea District Heating Corporation.
  • K-water.
  • SK E&S.
  • GS EPS.
  • GS Power.
  • POSCO Energy.
  • CGN Yulchon Generation.
  • Pyeongtaek Energy Service.
  • Daeryun Power.
  • S-Power.
  • Pocheon Power.
  • Dongducheon Dream Power.
  • Paju Energy Service.
  • GS Donghae Electric Power.
  • Pocheon IPP.
  • SPPC.
  • Narae Energy Service.

Photovoltaic and Wind

Since the introduction of the Renewable Portfolio Standard (RPS) in 2012, solar (photovoltaic) and wind power production have gradually increased. As an initiative to meet renewable energy targets stipulated in the 9th Basic Plan for Long-term Electricity Supply and Demand, Korea endeavors in adding 45.6 GW of solar generation capacity and 24.9 GW wind power capacity by the year 2034.  

Table: Solar (Photovoltaic) and Wind Supply Status (TOE)

Year

2016

2017

2018

2019

2020

Solar (photovoltaic)

1,183,308

1,672,437

2,193,980

3,055,183

4,155,969

Wind

355,340

462,162

525,188

570,816

671,072

Source: Korea Energy Agency (KEA)

Sub-Sector Best Prospects

  • Hydrogen Economy

In 2019, the Ministry of Trade, Industry and Energy released the ‘Hydrogen Economy-Roadmap of Korea’ plan. The 2019 roadmap presents visions and strategies to support all stages of technological development throughout the entire hydrogen value chain, from development of source technology in hydrogen-powered vehicles, core components of fuel cells, and storage and transportation, to demonstration, commercialization, and improvement of stability. The 2019 roadmap is reflected in the 3rd Energy Basic Plan and the 9th Electricity Supply and Demand Plan. Additionally, Korea’s Hydrogen Economy Promotion and Safety Management Act (Hydrogen Act) was enacted on February 4, 2020 and came into force one year later. The Act aims to promote the Korean hydrogen economy ecosystem by fostering hydrogen companies, deploying infrastructure, ensuring safety, and developing associated policies, institutions, and human resources.  Hydrogen companies with sales and R&D spending above a certain amount are eligible for government administrative and financial support.  The Act also aims to increase transparency in hydrogen pricing and requires industrial complexes, highway rest areas, and public garages to eventually install refueling stations.

As a follow-up to the 2019 roadmap, the Ministry of Trade, Industry and Energy announced the 1st Detailed Implementation Plan for Hydrogen Economy in November 2021.

Snapshot of Detailed Implementation Plan for Hydrogen Economy

 

Snapshot of Detailed Implementation Plan for Hydrogen Economy
Snapshot of Detailed Implementation Plan for Hydrogen Economy

 

Snapshot of Detailed Implementation Plan for Hydrogen Economy 2
Snapshot of Detailed Implementation Plan for Hydrogen Economy 

Source: ROK Ministries

  • Fuel Cells

With South Korea government policy support, this industry is forecasted to grow moving forward. The deployment and supply of fuel cells has increased and has a 2016-2020 CAGR (Compound Annual Growth Rate) of 33.4 percent. 

Table: Fuel Cell Supply Status (TOE)

Year

2016

2017

2018

2019

2020

Fuel cell

241,616

313,303

376,304

487,184

750,848

Source: Korea Energy Agency (KEA)

To date, South Korea has facilitated and deployed molten carbonate fuel cells (MCFCs) and phosphoric-acid fuel cells (PAFC) type technologies and installed solid oxide fuel cell (SOFC) technology for industrial and commercial applications. As part of the hydrogen economy roadmap, Korea seeks to further accelerate the deployment of fuel cells applications for power generation and homes/buildings.

  • Carbon, Capture, Utilization and Storage (CCUS)

In 2021, relevant ministries jointly announced ‘CCU technology innovation roadmap’ and presented a mid to long term R&D roadmap aiming to secure 14 commercialized CCU products by 2030 and achieve 30$/ton for CO2 capture cost by 2030. Korea endeavors to research and explore innovations in decarbonization technology in CCUS. CCUS technologies can involve the capture of CO2 emissions from power generation or industrial processes and subsequently the carbon dioxide is transported for underground storage or reuse. Institutions such as the Korea Institute of Geoscience and Mineral Resources (KIGAM), Korea Institute of Energy Research (KIER), Kongju National University, and others are engaged in research, development, and/or demonstration of CCUS technology.

Opportunities

As of 2021, Korea Electric Power Corporation’s (KEPCO) wholly owned power generation subsidiaries, collectively referred to as the GENCOs, sustained approximately 69.5 percent of the nation’s electric power generation, while local Independent Power Producers (IPPs) accounted for 30.5 percent. Korea Electric Power Corporation (KEPCO) is a state-owned power company and is responsible for the nation’s transmission and distribution. The GENCOs are one of the primary end-users of new and renewable energy (NRE) products and services. The trend of shifting the power source to NRE will continue under the Renewable Portfolio Standard (RPS) requirements.

The six GENCOs are:

Korea Hydro and Nuclear Power (KHNP).

  • Korea South-East Power (KOEN, formerly KOSEP).
  • Korea Western Power (KOWEPO).
  • Korea Midland Power (KOMIPO).
  • Korea Southern Power (KOSPO).
  • Korea East-West Power Company (EWP) .

Independent Power Producers (IPPs) include, but are not limited to:

POSCO Energy.

  • GS EPS.
  • GS Power.
  • SK E&S.
  • Pocheon Power.
  • Pyeongtaek Energy Service .

As end-users, the GENCOs and the Independent Power Producers (IPPs) exert strong influence in choosing what NRE core parts to use.

Resources

Trade Shows

  • International Energy Storage System Expo & Conference / International Smart Energy & Low Carbon Emission Expo & Conference (June 29 – July 1, 2022).
  • SWEET (Solar, Wind, Earth Energy Trade Fair) (July 6 – 8, 2022).
  • Environment & Energy Tech (August 31 – September 2, 2022).
  • Hydrogen Electric Energy Exhibition (September 14 – 16, 2022).
  • Korea Energy Show (September 28 -30, 2022).
  • 2022 NET ZERO EXPO (November 16 – 18, 2022).

Key Contacts

  • Korea Energy Agency (KEA).
  • Korea Electric Power Corporation (KEPCO).
  • MOTIE
  • Korea H2 Business Council

Local Contact

U.S. Commercial Service Korea   
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 03141, Korea
Tel: 82-2-397-4535
office.seoul@trade.gov

https://www.trade.gov/south-korea