Korea to invest $5.3bn in renewables

The country’s power utility plans to set up a $1.67bn fund to support the government's master plan.

Korea’s Ministry of Trade, Industry and Energy plans to increase investments in the country’s renewable energy sector to KRW6.4 trillion (€4.85 billion; $5.3 billion) in 2016 from KRW1.5 trillion last year. 

The investments will be made through state-owned utilities in a bid to develop renewable energy sources, improve the efficiency of Korea’s power sector and create new business opportunities for small and medium ventures, the government said.   

In addition to the headline target, the Ministry this week also announced the creation of a consultative body overseeing deregulation and investment promotion in the industry. 

Korea Electric Power Corporation (KEPCO), the country’s sole integrated power utility, will raise a KRW2 trillion fund by 2017 as it seeks to attract more private investments in the energy industry. The fund is expected to be invested in growing companies with innovative climate change-mitigating technology and collaboration projects abroad, according to local press reports.

KEPCO aims to invest KRW180 billion and KRW445 billion in energy storage systems in 2016 and 2017 respectively. The company will also spend KRW400 billion to install solar power panels on the rooftop of 1,000 schools, with some of the profits generated by the equipment expected to support school management.   

A total of KRW250 billion has been earmarked to equip two million households with advanced metering systems. 

KEPCO is planning to make a KRW200 billion investment as part of a tie-up with the private sector to build 20 electric vehicle charging stations. Another KRW300 billion will be spent on energy efficiency improvements, including LED replacements. 

South Korea has been relying on imports to meet about 97 percent of its total primary energy consumption due to insufficient local resources. Its power sector is dominated by state-owned utilities, with KEPCO generating around 83 percent of the electricity. 

According to KEPCO’s annual report 2015, fossil fuel sources account for nearly two-third of the country’s power generation, while nuclear accounts for 30 percent. The rest is contributed by renewables sources, primarily hydroelectricity and solar power.