South Korea could miss 2030 renewables target
South Korea is unlikely to meet its 2030 renewables target, says Wood Mackenzie at a media briefing in Seoul today. According to the consultancy's analysis, renewables will account for about 17% of the country's power mix, a little shy of its original target.
Shortly after Moon Jae-in took over the reins as President, the South Korean government unveiled its power supply plan where it is aiming for 20% of total electricity consumption to come from renewable energy by 2030. Last year, renewables account for just 7% of total power consumption.
To meet this target, the country has announced plans to cap operations of coal power plants, curb new construction of nuclear reactors and to phase out operational nuclear projects to accommodate more renewables. It will also need to escalate its renewable capacity installation.
"South Korea's renewables target is ambitious, no less. We are beginning to see the effects of the government's commitment towards greener energy sources," said Zi Sheng Neoh, managing consultant, Wood Mackenzie.
Wood Mackenzie expects the country's renewables capacity to triple from 2019 to 60.5 GW before the turn of the next decade. Solar and wind capacity installations make up the majority of this growth.
Moon’s government has planned the Saemangeum solar project on reclaimed land to add 3 GW of solar capacity into the grid by 2022. The project, however, faces scrutiny on economic feasibility, benefits to local solar manufacturing industry, and environment concerns.
"Despite the challenges, Wood Mackenzie expects at least 1 GW of solar capacity to be grid connected by the planned date. The project is likely to be deployed in four phases with capacities ranging from 0.3 to 0.8 GW each," added Neoh.
"By 2030, South Korea's solar capacity will hit 37.5 GW, four times of 2019. Rooftop solar or distributed solar will account for most of the growth."
Like solar, offshore wind capacity in South Korea will also rise significantly. It is expected to increase 64 times in 2019 to 6.4 GW by 2030. "The key to scaling up offshore wind capacity is national level projects to encourage and leverage on South Korea's deep expertise in shipbuilding to establish a mature offshore wind power supply chain including potential offshore floating technology," commented senior analyst Robert Liew.
Norway's Equinor has expressed interest in floating offshore wind, while the world's largest offshore wind power developer Ørsted is actively looking for opportunities in South Korea. Most recently, the local government of Ulsan City signed a memorandum of understanding with a development consortium that includes major foreign companies such as Shell, Denmark’s Copenhagen Infrastructure Partners, Swedish technology company Hexicon, and California’s Principle Power to explore large scale floating offshore wind development.
To cope with intermittency problems of renewables energy, a reliable battery storage system is needed. "South Korea is offering incentives to spur KRW 440 billion (app. US$ 393.9 million) investments in energy storage, equivalent to 800 MWh of storage by next year. We expect the market to overshoot this goal," said senior analyst Le Xu.
So what else needs to be considered for South Korea to hit its 20% renewables target?
"To reduce cost, there has to be access to corporate power purchase agreements which allows businesses to purchase electricity directly from renewable generators. On top of that, the annual Renewables Portfolio Standards targets and the Renewables Energy Certificate multipliers have to be consistently reviewed to ensure the mechanisms are fair to consumers while remaining attractive to investors to drive the renewables growth in South Korea," concluded Neoh.