[Exclusive] Is the Renewable Energy Supply Project a 'Lawless Zone'? Multiple Violations Detected in Audit

- Korea Energy Agency Conducts Audit on 340 Companies Participating in Renewable Energy Distribution Support Project
- 143 Violations Found in 8 Companies... 32 Companies Refuse to Submit Data
- Project Budget Increased from 100 Billion to 200 Billion Won Since Moon Administration... Approaching 300 Billion Won This Year

[Asia Economy Reporter Kim Bo-kyung] A large number of companies that received government subsidies after installing renewable energy facilities such as solar power have been found to have violated related laws and regulations during their participation in the project. Illegal acts such as entrusting installation to unqualified companies or subcontracting without directly constructing the facilities were confirmed belatedly.

According to the Ministry of Trade, Industry and Energy on the 18th, the Korea Energy Agency, an affiliated organization, conducted a special audit on 340 companies that participated in the renewable energy supply support project from 2016 to 2018.

The renewable energy supply support project is a program where companies selected by the agency install renewable energy facilities such as solar power, solar heat, and geothermal energy in houses and buildings, and receive government subsidies. Until 2017, the project was worth around 100 billion KRW, but the budget significantly increased from 2018 after the inauguration of the Moon Jae-in administration, reaching nearly 300 billion KRW this year.

As a result of the agency’s audit conducted in February, it was revealed that eight companies participating in the project committed a total of 143 illegal acts such as not directly constructing the facilities, lending their names, or subcontracting.

Participating companies are selected after evaluation of construction performance, creditworthiness, and technical personnel possession among companies holding the relevant licenses for each energy source. However, in the actual field, unqualified companies that were not verified for proper qualifications and capabilities ended up constructing the facilities. This violates the Electrical Construction Business Act (for solar power and small wind power) or the Framework Act on the Construction Industry (for geothermal and solar heat), punishable by imprisonment of up to five years or fines of up to 50 million KRW.

The audit office has requested the Renewable Energy Supply Division, the department in charge of the project within the agency, to refer these eight companies to the police for investigation and to take measures such as restricting their participation in the project.

According to the audit, 351 companies participated in this project over three years and carried out a total of 40,000 renewable energy facility construction works. In other words, the problem worsened as one company took on multiple construction projects. Company A violated the law in 47 out of 54 constructions. Company B violated the law in 46 out of 48 cases, and Company C in 39 out of 98 cases.

That is not all. Among the audited companies, 32 did not respond at all to the agency’s request for submission of materials to verify violations. This also violates related regulations and results in a restriction on project participation for more than two years. The agency also issued warnings to 62 companies that did not directly perform the task of preparing and submitting on-site inspection sheets to verify compliance with construction standards after installation, instead having employees of affiliates or subcontractors do so.

Despite the surge in misconduct, this year’s renewable energy supply support project is underway with a record budget of 292.6 billion KRW.

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