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Press Release
(April 30, 2009)
202
Ministry of Knowledge Economy, “The Plans to Strengthen the Industry Infrastructure
for New and Renewable Energy,” August 2009.
166
Standard (RPS). To secure the sustainable growth engine for solar PV industry, the R&D
supports for second- and third-generation solar PV technologies were expanded.
In 2010, the Ministry declared its goal of the fifth largest renewable energy
economy by 2015.
203
It planned to promote solar PV as the second semi-conductor
industry, which is one of the leading export industries in South Korea. To achieve this
goal, the Ministry planned to pursue four strategies: 1) Strategic R&D supports and
commercialization; 2) Market creation for industrialization; 3) Promotion of export
industry; and 4) Strengthening the base for industry growth. With these strategies, the
Ministry expected to achieve the exports of 36.2 billion USD, and to create 1.1 billion
jobs by 2015.
Although the goal was very ambitious, the solar PV industry did not feel that they
were significantly benefitted from this policy. A former head of the NREC said: “It was
just a rhetoric. If there is a national agenda, it should be followed by policy tools,
measures, financing and budget plans, but there was only a slogan without tools or
measures”.
204
An executive from a solar corporation said that the R&D supports from the
government, which were increased by this policy was not very helpful for them because
they were struggling with shrinking exports due to the rise of Chinese manufacturers. She
said: “R&D was an unrealistic story when we could not export our products. The
government intended to promote industry by technology development, but that was not
the thing that the market needed. What was necessary was to create a big market”.
205
203
Ministry of Knowledge Economy, “Investing 40,000 billion KRW, Becoming the fifth
largest renewable energy economy by 2015,”
Press Release
(October 13, 2010)
204
Interview #33
205
Interview #38
167
Other than the targets and R&D supports, the government has also established the
policies to support the industry directly. In 2011, the NREC introduced the programs to
support small and medium-sized enterprises of new and renewable energy. The programs
included feasibility study support, international exhibitions support, international
certificate acquirement support, new and renewable energy expert consulting center,
hosting Korea energy show, and developing demonstration projects in foreign countries.
Han, Jong-hyun, the head of international relations at the NREC, explained the
background of the implementation of these policies: “The year of 2011 was the right
timing to implement these programs since the technologies were developed, domestic
market was saturated, the global investments were increasing, and the Korean firms
wanted to expand their business as a new growth engine.”
206
As part of the supporting policies for domestic renewable energy corporations, the
Korea Energy Agency has implemented a hybrid energy project with the Asian
Development Bank in Philippines to establish “a stepping stone for SME’s overseas
business” since 2012. Han, Jong-hyun said that this project helped the Korean
corporations participated in the project with obtaining track records: “This would be
helpful for Korean companies to participate similar projects in the future.”
207
He also
pointed out that this project showed that Korean products were good quality products that
could be used in tropical islands.
The Renewable Portfolio Standard (RPS) was introduced in 2012. According to
“the Enforcement Decree of the Act on the Promotion of the Development, Use and
Diffusion of New and Renewable Energy,” which include the rules for the RPS, the
206
Observation #25
207
Observation #25
168
power utilities that own plants generating more than 500MW are required to supply a
certain percentage of the volume of electricity generation using new and renewable
energy.
208
Thirteen big power producers including six government-affiliated
organizations are subject to the RPS. Through the implementation of the RPS, the
government expected to significantly increase the share of renewables, to lower the costs
of renewables through competition, and to create a large-scale renewable energy market,
which will contribute to the development of domestic industry. To promote solar PV,
additional annual targets for solar PV were set. A former head of the NREC, pointed out
that domestic market expansion without financial burdens of the government was the
most important reason to adopt the RPS: “The purpose of the RPS was to create the
market-driven system without adding government money. The FIT requires exponentially
increasing government supports”.
209
Apparently, the RPS was successful to increase solar PV installation. Since the
introduction of the RPS in 2012, the solar PV installation has enormously increased
(Figure 36). In 2012, the installation of solar PV has been almost four times of the
installation of the previous year. In 2013 and 2014, the installation has been twice of that
of the previous year. This sharp increase of solar PV installation was unexpected at the
timing of the introduction of the RPS. The government set additional targets of solar PV
installation to promote solar PV market, but the solar PV installation has much exceeded
the targets. Under this circumstance, the additional targets for solar PV have been a
barrier of the expansion of solar PV rather than a driver of it.
208
Ministry of Knowledge Economy, “The Enforcement Decree of the Act on the
Promotion of the Development, Use and Diffusion of New and Renewable Energy,”
(September 17, 2010)
209
Interview #25
169
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