South Korea - Country Commercial Guide
Energy: New and Renewable

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

Last published date: 2021-08-13

ITA CODE: PR REQ

Overview

 

2018

2019

2020 (est.)

2021 (est.)

Total Market Size

7,204

7,699

8,288

9,702

Total Local Production

8,968

9,182

9,946

11,684

Total Exports

3,145

2,915

3,274

3,915

Total Imports

1,381

1,432

1,616

1,933

Imports from the U.S.

N/A

N/A

N/A

N/A

Korean Government Investment Plan

862

955

1,003

 

1,339

 

Exchange Rate: 1 USD

1,110

1,165

1,179.6

1,125.6

Total Market Size = (Total Local Production + Total Imports) – (Total Exports), Imports from U.S.: NA, Unit: $millions.
Sources: Korea Energy Agency (KEA), and other industry sources.
Note: The above statistics are unofficial estimates by Commercial Service Korea, based on above information sources.

South Korea retains industries that are considered highly energy-intensive, with imported energy sources meeting almost 96 percent of its energy requirements, as the country lacks sufficient natural resources. In 2020, 552,165 gigawatt hours of electricity power was generated in South Korea, with coal representing approximately 36 percent of the total electricity generation. South Korea’s CO2 emissions from fuel combustion – million tons of CO2 – was 606 in 2018, compared to 432 in 2000 (International Energy Agency (IEA) CO2 Emissions Statistics).

In terms of deployment, the supply of new and renewable energy was 7.5 million TOE for 2011 and 16.2 million TOE in 2019 respectively, with a 2011-2019 CAGR (Compound Annual Growth Rate) of 10 percent.   

   New and Renewable Energy Supply (TOE thousands)

2011

2012

2013

2014

2015

2016

2017

2018

2019*

7,583

8,851

9,879

11,537

13,293

14,178

16,448

17,838

16,246

 

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.

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 500MW are required to include a certain percentage of renewable energy in their production portfolio.

  Renewable Portfolio Standard (RPS) ratio (%)

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2%

2.5%

3%

3%

3.5%

4%

5%

6%

7%

9%

10%

10%

Source: Korea Energy Agency (KEA)

As of 2021, 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

In December 2017, Korea announced the biennial 8th Basic Plan for Long-term Electricity Supply and Demand (‘8th Plan’), which articulated Korea’s endeavor to gradually move away from nuclear and coal as sources of power and rely more on cleaner and safer sources of energy, such as natural gas and renewable energy. Korea will aim to generate 20 percent of electricity from renewable energy sources by 2030. Subsequently, in December 2020, through the 9th Basic Plan for Long-term Electricity Supply and Demand (‘9th Plan’), Korea reaffirmed its commitment in shifting to green energy. The 9th Plan also implied closure of coal-fired power plants whose 30-year operational life cycles expire by 2034.

Sub-Sector Best Prospects

Fuel Cells – With ROKG policy support, this industry is forecast to grow moving forward. The deployment and supply of fuel cells has increased and has a 2014-2017 CAGR (Compound Annual Growth Rate) of 19.5 percent. 

    Fuel Cell Supply Status (TOE)

Year

2014

2015

2016

2017

2018

2019

Fuel cell

199,369

230,173

241,616

313,303

376,304

487,184

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:   Source: Korea Energy Agency (KEA)

 

  Hydrogen Economy Roadmap

Power  Generation   2018 (307 MW)  2022 (1.5 GW)    2040 (15 GW)

Homes/Buildings     2018 (5 MW)       2022 (50 GW)     2040 (2.1 GW)

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

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.

Solar (Photovoltaic) and Wind Supply Status (TOE)

Year

2014

2015

2016

2017

2018

2019

Solar (photovoltaic)

547,430

849,379

1,092,832

1,516,343

1,977,148

2,787,935

Wind

241,847

283,455

355,340

462,162

525,188

570,816

Source: Korea Energy Agency (KEA)

Demand Response (DR) – Although not applicable to South Korea’s Renewable Portfolio Standard (RPS) quota, Demand Response (DR) has grown substantially since its inception in 2014. Also known as the ‘Negawatt’ market, electricity users such as industrial factories, commercial buildings, etc., can save electricity during a specified timeframe and be compensated for saving electricity. According to the Korea Power Exchange (KPX), as of December 2020, there were over approximately 29 qualified Demand Response (DR) service providers in South Korea:

  • Gridwiz
  • Manage On
  • Byuksan Power
  • KT  
  • POSCO ICT  
  • Enel X , and  others

Since its inception in November 2014, the number of Demand Response (DR) consumers or participants has increased, with diverse industrial sectors represented. As of September 2020, approximately 1,616GWh of electricity power was saved through the DR program.

Carbon, Capture, Utilization and Storage (CCUS) – South Korea seeks to target carbon neutrality by 2050. In December 2020, Korea submitted an updated Nationally Determined Contribution (NDC), with the updated target to reduce 24.4 percent of the total national greenhouse gas (GHG) emissions by 2030, from their 2017 levels. As one initiative to this end, 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 the research, development, and/or demonstration of CCUS technology.

Opportunities

As of 2020, Korea Electric Power Corporation’s (KEPCO) wholly owned power generation subsidiaries, collectively referred to as the GENCOs, sustained approximately 71 percent of the nation’s electric power generation, while local Independent Power Producers (IPPs) accounted for 29 percent. The 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 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

Electric Power Tech Korea 2021

Korea Energy Show 2021
 

Key Contacts

Korea Energy Agency (KEA)

Korea Electric Power Corporation (KEPCO)

Local Contact

Seuk Bong (S.B.) SHIN (Mr.)
Commercial Specialist
U.S. Commercial Service Korea
U.S. Embassy
188, Sejong-daero, Jongno-gu
Seoul 03141, Korea
Tel: +82-2-397-4186
sb.shin@trade.gov
https://https://www.trade.gov/south-korea