Government to Foster Energy Small Giants... "Promotion of Development Projects"

"Activation of New Energy Industries and Establishment of a Foundation for Successful Energy Transition"

[Asia Economy Reporter Moon Chaeseok] The Ministry of Trade, Industry and Energy announced on the 7th that it will newly promote the 'Technology Innovation-type Energy Small Giant Company Development Project' starting this year.

The project was planned to establish a growth foundation for energy ventures. Energy ventures are venture companies that provide new products and services in the energy new industry fields such as renewable energy power generation, energy efficiency improvement, and power demand management.

For example, they engage in businesses such as solar power plant feasibility consulting (location, power generation, etc.), integrated design, procurement, and construction (EPC) solutions, demand response (DR) consignment services, energy storage system (ESS) integrated control, and energy usage monitoring and optimization.

Energy ventures have been found to have better profitability and growth potential compared to other ventures. As of 2018, the average sales of energy ventures were 9.7 billion KRW, about twice the average of 5.3 billion KRW for all venture companies. Looking at the average sales growth rate, from 2017 to 2018, energy ventures grew by 9.4%, while the overall average was 7.9%.

The Ministry of Trade, Industry and Energy expects energy ventures to play a key role in the successful energy transition and the creation of new markets in the energy sector in the future. Recently, technology-based energy ventures utilizing new technologies such as artificial intelligence (AI), big data, and the Internet of Things (IoT) have emerged, promoting industry convergence and providing new services.

This development project supports research and development (R&D) for the commercialization of products and services in the energy new industry sector. To this end, support will focus on technologies that implement new business models reflected in major national energy policies.

The '3rd Basic Energy Plan' established in June last year includes content related to business models such as ICT demand management, 'Energy Pause' (National DR - a project where citizens receive government subsidies proportional to reduced electricity usage), and energy management service providers.

The '4th Energy Technology Development Plan' announced in December last year presented IT-based DR and power brokerage, integrated operation and maintenance (O&M) of renewable power generation, and big data-based energy management systems.

The development project supports companies that have proven marketability and profitability and have received private investment. Through this, it aims to increase the likelihood of business success and induce follow-up investments from private financial institutions such as venture capital (VC).

As a condition for recognizing investment attraction, cases where more than 30% of the government contribution fund is invested by private investment institutions such as venture capital companies, banks, VCs, and private equity firms are set.

During the development project process, the government plans to focus on evaluating the appropriateness of R&D tasks and the company's growth strategy through R&D when conducting selection evaluations.

This year, up to six energy ventures will be supported in the commercialization of energy-ICT convergence products and solutions, and in the energy industry parts, materials, and manufacturing innovation sectors.

Support will be provided for the development of essential products or solution (SW) technologies in the energy new industry, such as renewable energy power generation forecasting combined with ICT, pre-fault diagnosis and power generation optimization, virtual power plant (VPP) operation and management, and distributed power load adjustment algorithm development.

To accelerate commercialization and sales generation, technology development from the manufacturing innovation perspective, such as improving the performance of energy industry materials and parts, securing product safety, and reducing process costs, will also be supported.

The development project will accept business plan submissions until the 8th of next month. Detailed information regarding the announcement can be found on the Ministry of Trade, Industry and Energy website and the Korea Energy Technology Evaluation Institute website.

The Ministry plans to conduct expert evaluations by the end of next month to select new energy ventures for support and will begin full-scale R&D funding from July.

This content was produced with the assistance of AI translation services.