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Renewable Power Generation – Korea’s Story

Renewable Power Generation – Korea’s Story. 6 th March, 2013 YoonKyung Chung Korea Energy Economics Institute (KEEI). Outline. I. Recent New and Renewable (NRE) Trends in Korea NRE Development and Deployment Policies Electricity Market Structure in Korea

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Renewable Power Generation – Korea’s Story

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  1. Renewable Power Generation – Korea’s Story 6th March, 2013 YoonKyung Chung Korea Energy Economics Institute (KEEI)

  2. Outline I. Recent New and Renewable (NRE) Trends in Korea • NRE Development and Deployment Policies • Electricity Market Structure in Korea • Major Renewable Support Policy – Renewable Portfolio Standard (RPS) • Bringing Renewable Power to the Grid

  3. I. Renewable Energy Trends in Korea • Key National Energy Strategy - Formulate and implement energy policies consistent with the promotion of low-carbon green (economic) growth • The growing role for new and renewable energy sources in energy mix. - Climate change : the need to reduce greenhouse gas (GHG) emissions (30% CO2 reduction by 2020) - Energy security : reduce import dependence (97% of fuel) - Rising fossil fuel prices - Job creation (as a new growth strategy) • New and Renewable energy (NRE) include eleven energy sources: - Solar Photovoltaic (PV), Solar Thermal, Wind, Hydro, Geothermal, Marine, Bio (Bio-mass, Bio-diesel), Waste, Hydrogen, Fuel Cell, Coal Liquefaction/Gasification.

  4. II. NRE Development & Deployment Policies • Invest in strategic R&D to develop and commercialize key technologies Government Investments in NRE R&D NRE R&D accounted for 1.7% of all government R&D investments in 2009. • Implement various deployment programs to create domestic NRE markets

  5. Due to government support policies and programs, the size of NRE industry grow rapidly in recent years. The Size of NRE Industry in Korea Source: New and Renewable Centre, KEMCO. Note that the current exchange rate (Oct.2012) was used to convert Revenues from Sales into dollar amount. • In addition, private investment in NRE quadrupled from $774 million in 2007 to $3.1 billion in 2011 (KEMCO).

  6. III. Electricity Market Structure in Korea Source: Korea Power Exchange (2011), “Electricity Market Trends & Analysis,” 2011 Annual Report

  7. Electricity Generating Capacity by Fuel Type Electricity Generation by Fuel Type Source: The Sixth Basic Plan for Long-Term Electricity Demand and Supply (2013), Ministry of Knowledge Economy(MKE) Note: Year 2012 Generating capacity and generation are estimates by KPX.

  8. IV. Renewable Portfolio Standard (RPS) • Requires power utilities with capacity in excess of 500MW to generate 2.5% of their electricity from NRE sources in 2013, increasing to 10% by 2022. • In addition, separate quota is given for solar PV till 2016.

  9. Electricity Generation by NREs Forecasts Source: MKE (2013), “The Sixth Basic Plan for Long Term Supply and Demand” Note: 2010 and 2011 are actual amount from KPX (2012), “2011 Current Generation Capacity”

  10. V. Bringing Renewable to the Grid • Till now the share of renewables has been too small to cause stress to the power network. - to ensure grid stability, grid codes for renewable power generators > 20MW were established in 2010. * build communication infrastructure that enables grid operators to monitor the operation * maintain electricity quality * allow output control in case of emergency • However, this share is expected to grow as well as large-scale grid integration of renewable energy, fostered by RPS. • Experts say the current electric power system will falter if the share exceeds 20% of total supply. • Sudden fluctuations in output and low peak demand contribution due to its intermittent nature threatens grid stability under the current electricity system.

  11. 1. Energy Management System – using smart-grid technology • “incorporates information and communications technology into every aspect of electricity generation, delivery and consumption” • “two-way” communications between producers and consumers reduce peak demand and allow load shifting using real-time pricing Progress in Korea • JejuIsland Smart-Grid Pilot Project launched in Sept. 2009 - a test-bed for smart grid system - cost: $230 million (Gov. $70 mil, Private $160mil)

  12. Jeju Island Smart Grid Pilot Project Source: Jae-Sik Park (2012), “Korean Activities on Smart Grid and Energy Storage System,” Korean Agency for Technology and Standards.

  13. Smart Grid Roadmap was announced Jan. 2010. Source: Korea Electrotechnology Research Institute (2011), “A Study on the Smart Grid System based Network Operations and Information Delivery System Set-up”

  14. Enactment of Smart Grid (SG) Promotion Law in Nov. 2011 - a legislative framework for a national smart grid system • Select 3-5 cities as “smart-grid base” in 2013, then begin smart-grid system installments in 2014. • Complete nationwide smart meters installments by 2020 in accordance with the SG promotion law. • Enable “the use of IT for two-way communication between power suppliers and consumers possible nationwide” by 2030.

  15. 2. Energy Storage System (ESS) • Store electricity when demand is low and release at peak demand (load leveling, peak shaving and time shifting). • Plans to install ESS units as a part of Advanced Meters Infrastructure (AMI) deployment program in buildings, up to 11MW in 2013 • Plans to expand ESS distribution: 500MW by 2015, 2,000MW by 2020  considering Korea faces limitations in exploiting renewable resources, a large-scale transmission of renewable electricity from other nations is an attractive option.

  16. 3. Northeast Asia Super Grid • A feasibility study on super-grid initiative program for Northeast Asia was conducted by KEPCO between (10.2011– 5.2012) • Proposed Plan - Connect Russia – North Korea – South Korea – Japan via a transmission grid of HVDC/HVAC transmission lines, WAMS (Wire-Area Sensor Network) and transformation stations. - a 2000-3000km continental grid

  17. Sakhalin NG Bureya Hydro Khasan Rajin-Sonbong Korea-Japan

  18. The study concludes that it • enhances energy security by securing an access to Far East Russia’s rich energy resources (petroleum, natural gas, and renewable resources) • provides new economic opportunity for Korean Independent Power Producers (IPPs) and energy infrastructure firms (Engineering, Procurement & Construction, EPC) • - South Korea has the technology and energy demand • - North Korea can provide inexpensive quality labour • - For Russia, it can be a strategic plan in dealing with Japanese and Chinese • expansion to Far East in areas of energy, agriculture and fishing. • And current political, economic and social environment surrounding the Korean peninsula makes it an attractive and viable opportunity.

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