The Ministry of Trade, Industry and Energy announced on March 29 that discounts on electricity bills for renewable energy user-producers will be expanded. The new amount of the discounts will equate to the value of up to 75 percent of renewable electricity generated and consumed.
Under the current special rules to promote renewable energy, its user-producers are eligible for a 10-percent or higher discount on their electricity bills under the condition that the amount of green electricity produced and consumed exceeds one fifth of their total power consumption.
The new policy proposal makes this discount available to a wider group of user-producers of renewable energy by easing requirements to qualify for discounts on utility bills. It also increases the amount of discounts to rates applicable to up to 50 percent of green electricity produced and consumed. The more renewable electricity they produce and use, the larger discounts they will receive.
Further discounts will be given when the renewable energy user-producers use energy storage systems (ESSs). The amount of further discounts will be as large as half of the discounts for renewable electricity consumption, depending on the size of the ESSs.
The improvement to the existing rules was discussed during the second meeting of the “energy policy high-level advisory group” held in Seoul on March 29. The meeting was presided by Trade, Industry and Energy Minister Joo Hyunghwan, and attended by leaders from the energy industry and academia including GS Caltex Honorary Chairman Hur Dong-soo, Daesung Group Chairman Kim Young-hoon, and Korea Advanced Institute of Science and Technology Professor Chung Kun-mo.
During the meeting, Minister Joo discussed three policy directions the government plans to focus on in order to accelerate the generation of electricity from renewable sources and efficient power consumption. One of them is the expansion of renewable energy-linked discounts on electricity bills.
The Ministry also plans to come up with an energy mix with a larger proportion of renewable energy and less coal. This policy will accompany investment into transmission and distribution networks, development of back-up power sources and improvement of coal-fired power plants. For nuclear power generation, the Ministry will seek best-possible measures that take into account stable energy supply, energy security as well as public acceptance in the process of drawing the eighth Basic Plan on Electricity Demand and Supply.
The third policy direction involves the upgrading of the energy efficiency rating system. The standards for energy efficiency ratings of five product groups including refrigerators, air conditioners and heaters will be toughened, so that the top 10 percent receives a first-grade rating. Under the current system, more than 30 percent of the products in those groups have received a first-grade rating.
When these policies are properly implemented, the time taken to recoup investment into renewable generation facilities will significantly shorten while the amount of greenhouse gases and fine dusts emitted from coal-fired plants will more than halve, Minister Joo said. The tougher energy efficiency standards are expected to help save additional 121 gigawatt hour of electricity worth 19.3 billion won every year.
The government has strived to implement the new paradigm of energy policy, “eco-friendly power generation and efficient consumption.” The renewable generation requirements in the renewable portfolio standard (RPS) have been expanded, and long-term, fixed-price contracts for solar and wind power generators were introduced. The government also decided last year to shut down 10 aging coal-fired power plants.
Furthermore, the government introduced special electricity rates to promote the use of ESSs while focusing policy capacities on the distribution of electric vehicles by raising subsidies for EVs, introducing special tariffs for charging and developing battery technologies.
As a result, around 11 trillion won has been invested into new energy businesses last year. The distribution of ESSs soared 50 percent, and renewable energy-related exports surpassed 4.5 billion USD.
The Ministry will continue communicate with the high-level advisory committee as well as experts from various fields and civic groups and reflect the outcomes in energy policies in order to build the growth momentum for new energy businesses.
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