S Korea to spend $42B by 2020 in green power drive
KENTARO OGURA, Nikkei staff writer
SEOUL -- The Korea Electric Power group plans to spend a total of 42.5 trillion won ($42 billion) by 2020 to achieve a 16-fold increase in its renewable power generating capacity.
The group's plan to ramp up its clean electricity capacity by 11.5 gigawatts over six years is in line with the government's policy of promoting renewables. But tough challenges lie ahead if the target is to be reached, including finding the land need for the facilities.
State-run Korea Electric and its six subsidiaries have come up with an investment plan designed to expand green power. The utility aims to raise its renewable generating capacity to 12.26GW by 2020 from 760 megawatts at the end of 2012. Of the 11.5GW of additional capacity, 60% will come from wind power, according to the plan.
Clean and green
One large-scale project is a 2.5GW wind farm to be built in the Yellow Sea off southern Jeolla Province. The group has already set up a new company to carry out the project and received the green light from the government to operate the plant. Initially, there will demonstration tests for a 100MW facility. Korea Electric is betting the country's sophisticated shipbuilding technology will come in handy.
The group also hopes to increase its solar generating capacity by 1.3GW by installing solar panels on the roofs of schools and other public buildings. The utility will also consider renting space on the roofs of private homes to install panels and pay a portion of the revenue produced to homeowners. In addition to securing space for solar equipment, the scheme aims to raise public awareness of the importance of renewable energy.
Easier said than done
In 2012, South Korea introduced regulations requiring utilities to generate a portion of their power from renewable sources. That share will be raised gradually from 2% to 8% by 2020. As of 2012, Korea Electric and other utilities had only reached 65% of the initial quota. To reach the longer-term target, more renewable capacity will need to be installed quickly. Some industry executives are skeptical of the government's plans. "It is rather a goal to strive for than an actual plan to carry out," said one.
Like Japan, South Korea does not have wide swaths of flat, open spaces for wind or solar power generation. Geography presents a big challenge to the government's clean energy drive. Offshore solar power avoids the space problem, but pushes up costs.
Even without these obstacles, renewable energy costs far more than conventional power sources such as fossil fuels. The government has kept electricity rates artificially low by rejecting rate hikes from Korea Electric. This will further complicate the effort to expand green energy in South Korea.