The South Korean government declared it will open up state-owned property, including rooftops and idle land, in a move to accelerate solar project development in the country.
Shortly after the announcement, Canadian Solar said it had secured the exclusive rights to develop an 8MW solar farm in Gangwon Province and will start construction in early 2019.
Solar development in the country has hit several stumbling blocks, not least of which has been site acquisition – the difficulty of which is due to the country’s high population density and the prevalence of mountains, according to Moody’s.
“The government’s support for site acquisition for solar power generation will help state-owned power companies, including KEPCO, and also private sector investors to promote solar projects in Korea, because the move will likely make it easier for them to secure sites for such projects,” Mic Kang, a vice-president and senior credit officer at rating agency Moody’s, told Infrastructure Investor.
State-owned property accounted for around 24,940 square kilometres, or 25 percent of Korea’s total land, at the end of 2017, the Moody’s analyst said, citing government statistics. However, “how much of a property will accommodate solar panels remains to be seen,” Kang said.
South Korea’s Ministry of Trade, Industry and Energy did not respond to queries seeking further details about the plan by the time of publication.
Non-renewable power companies in South Korea are required to produce a certain proportion of power – 5 percent in 2018 – from renewable sources under the Renewable Portfolio Standards, a system which replaced the previous feed-in tariff scheme in 2012 to encourage renewables development.
The power companies can either build their own renewable energy projects or purchase renewable energy certificates from renewable energy generators. For example, KEPCO, the country’s largest state-owned power company, incurred annual costs of 1.2 trillion won ($1.11 billion; €940 million) in 2017 for REC purchases on a consolidated basis.
Ontario-based developer Canadian Solar has been active in the country for the past 10 years, manufacturing PV modules, but the latest move marks its first project development in the country.
“The Korean government has recently increased its solar capacity installation target to 36.5GW from 5.7GW in order to generate 20 percent of electricity from renewable energy sources by 2030,” noted Shawn Qu, chief executive and chairman of Canadian Solar, in a statement.
The project details, such as the source of land, were not disclosed. Canadian Solar had not responded to queries seeking further information by the time of publication.