South Korea cuts capacity allocations from 4 GW to 2 GW in solar tenders

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South Korea’s Ministry of Trade, Industry and Energy (MOTIE) recently published the 10th Basic Plan of Long-Term Electricity Supply and Demand. It reduces the 2030 renewable energy target from 30.2% to just 21.6%.

Last week, a group of 9 Korean citizens filed to revoke the plan at the Seoul Administrative Court.

“The government said that the target reduction was in consideration of the public acceptance and feasibility related to renewable energy deployment,” Yebin Yang, a researcher at Seoul-based NGO Solutions for Our Climate, told pv magazine.

Yang said the change will act as a signal to the market and will affect the entire renewable energy market.

“With government goals and policies drastically changing from one administration to the next, the unpredictability will unsettle investors who would shy away from actively investing in clean energy businesses and projects in the weakening renewable energy industrial ecosystem,” she added. “Moreover, this makes it difficult for changes favorable to renewables to take place.”

Kim said the South Korean government plans to scale back its feed-in tariff policy and reduce the amount of renewable energy certificates (RECs) issued under the renewable portfolio standard (RPS) scheme for 2023 and onwards.

“The size for the solar PV bid under South Korea’s Renewable Energy Certificate (REC) scheme has been set to 1,000 MWa 50% decrease compared to the same period last year, when 2,000 MW for each procurement exercise was allocated,” Yang said. “It looks like the renewable curtailment problem will only get worse as the latest plan proposes building new LNG plant facilities while lacking the roadmap that would resolve the renewable energy curtailment issue.” 

The South Korean Energy Agency held two 4 GW of PV tenders last year. In the two tenders held in 2021, it allocated capacity in 2 GW and 2.2 GW rounds, and contracted 1.2 GW and 1.4 GW in 2020. South Korea's new electricity plan has increased the 2030 target for nuclear power from 23.9% to 32.8% and the target for liquefied natural gas (LNG) from 19.5% to 20.9%.

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