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Parts and materials technology development
Promotion of new and renewable energy 2014-12-30


"The Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy" defines new and renewable energy as energy resources converted from existing fossil fuel resources or renewable energy sources, including the sun, water, geothermal heat, precipitation, and bio-organisms. The Act identifies 11 such resources, including solar energy, bioenergy, wind power, hydro power, fuel cells, liquefied or gasified coal, gasified heavy oil residue, tidal power, waste-to-energy, geothermal energy, and hydrogen energy. Despite its weak economic feasibility due to the lack of price competitiveness and the high initial investment costs, new and renewable energy is becoming increasingly important and necessary as a key solution to fossil fuel depletion and other environmental issues. As of 2012, the penetration rate of new and renewable energy was 3.18% that of primary energy. This rate rose by 10.9% annually on average from 2008 to 2012, almost three times faster than the 3.7% annual average growth of primary energy penetration during the same period. Waste-to-energy and bioenergy represented 80% of the entire new/renewable energy supply base, while solar energy and wind power accounted for just 5%.


Since Korea is heavily dependent on overseas markets for its energy needs and deeply and extensively affected by oil price changes, stable demand/supply management has always been a priority. The Korean Government therefore established and announced the "Alternative Energy Development Promotion Act" in December 1987 and started to provide support for technology development in 1988.


In September 2014, the government released the "Fourth Basic Plan for Technology Development, Application, and Deployment of New & Renewable Energy (2014-2035)" which is aimed at increasing the share of new and renewable energy in total energy consumption to 11% by 2035. This master plan consists of detailed development and distribution plans for each type of new and renewable energy. The plan is not only ambitious but also presents a feasible penetration goal based on a rigorous analysis of geographical conditions, technology levels, and marketability. Under this plan, the Korean government seeks to develop solar energy and wind power as key resources while reducing the proportion of waste-derived energy.


Under this policy, MOTIE promotes voluntary private investment by providing a more market-friendly system, profitable business models, relaxed regulations, and suitable diffusion models, with the aim of building a new/renewable energy industry ecosystem on the basis of public-private partnership as opposed to traditional government-led efforts. MOTIE also seeks to establish a virtuous cycle between overseas expansion and domestic distribution by looking beyond the Korean market and sharpening global competitiveness. The following paragraphs provide further details on policy strategies.

Consumer-oriented supply and diffusion

  • MOTIE will employ and spread revenue models that are backed by consumer participation (e.g. collaboration with residents, eco-friendly energy towns), which would increase the use of new/renewable energy through the participation of the general public and sharing of results. MOTIE will also implement unsubsidized rental projects in which private firms provide necessary services spanning from facility installation to warranties in return for rental fees paid by consumers.

Market-friendly system (adjustment of RPS target)

  • Taking into account domestic conditions, MOTIE has modified the binding goal for new/renewable energy supply under the Renewable Portfolio Standard (RPS) program (10% by 2020 → 10% by 2022) and increased the amount of energy supply consigned to private providers (150MW during 2014-2015 → 200MW during 2016-2017) in order to support small businesses that may have difficulty finding sales channels.

Overseas expansion

  • In addition to assisting domestic business activities under the "Financial Support Project for New and Renewable Energy (2014, 103.4 bn KRW)," MOTIE will provide support to SMEs looking to expand overseas to help them raise capital more easily.
  • MOTIE will also devise a customized strategy for each promising market based on thorough analysis and continuously explore overseas expansion opportunities through cooperation with other governments and international organizations.

Market development

  • MOTIE plans to broaden the spectrum of market segments by adding transportation and thermal energy to the current electric energy-centered market, and develop viable energy resources using thermal effluent from power plants. It will implement the Renewable Fuel Standard starting with bio-diesel in July 2015. In addition, it is currently considering the introduction of a Renewable Heat Obligation, which would mandate the use of a predetermined quantity of new/renewable energy for heat in buildings.

Enhancement of R&D and institutional system

  • MOTIE will strengthen R&D in both the short-term (pragmatic R&D to enable early diffusion through generation cost reduction, commercialization, verification, etc.) and the long-term (enhancement of global competitiveness through development of promising technologies and expansion of convergence), and ease the burden on the business sector by streamlining facility certifications into Korean Industrial Standards (KS) and revamping related regulations in a market-friendly way.


  • The Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy

Press releases

  • Regulation and system improvement underway to vitalize new/renewable energy industry (10 Jun 2014)
    "RPS Management and Operation Guideline" revised (12 Sep 2014)
    New and renewable energy policy to focus on consumer/market demand and overseas expansion (19 Sep 2014)


  • New & Renewable Energy Center, Korea Energy Management Corporation New Window