Struggling to Expand Offshore Wind Power Supply... Clarifying Support Scope

Ministry of Industry to Amend Support Laws for Areas Around Power Plants... "Increasing Resident Acceptance"
Renewable Energy 3020 Plan Sets Offshore Wind Power Supply Target of 12GW by 2030

[Asia Economy Reporter Moon Chaeseok] The government is announcing a partial amendment to the enforcement decree to clarify the scope of areas surrounding offshore wind power plants and the criteria for calculating support funds. This is because more demand needs to be drawn to achieve the offshore wind power supply target of '12GW by 2030' stated in the Renewable Energy 3020 Implementation Plan. The core of the amendment is to enhance benefits for areas close to power plants to increase the effectiveness of the system.

The Ministry of Trade, Industry and Energy announced on the 31st that it will announce the partial amendment to the enforcement decree containing these details for legislative notice starting from July 1. After a 40-day period for collecting opinions, it will be enforced from August 5. When the 'Act on Support for Areas Surrounding Power Plants' (Power Plant Act) was amended on February 4, it was decided to establish separate surrounding area scopes and distribution methods by local governments for existing onshore power plants.

The Ministry expects that the amendment to the enforcement decree will strengthen support for areas 'more than 5km away from the coastline,' where most offshore wind power facilities are located. Currently, there is no separate standard, so the 'within 5km' standard for onshore power plants is applied. Furthermore, it will encourage more support for areas closer to the installation waters of the power plants and for local governments where fishing activities are active in those waters.

Source: Ministry of Trade, Industry and Energy

First, the 'scope of surrounding areas' in Article 2 of the law will be newly defined. Surrounding areas will be set based on the coastal point of the land closest to the power generator.

The 'standard area' includes ▲ areas within a 5km radius from the coastal point closest to the power generator and within 2km perpendicular from the coastline ▲ island areas within the distance to the coastal point closest to the power generator.

The 'surrounding area' refers to the eup, myeon, or dong (township or neighborhood) to which the standard area belongs.

Source: Ministry of Trade, Industry and Energy

Criteria for calculating special and basic support funds will be established. The support scale will be calculated based on construction costs and power generation two years prior. Support funds will be proportionally reduced as the distance from the power plant to the land or island increases.

Special support projects are calculated within 1.5% of the power plant construction cost excluding land acquisition costs. The support funds for existing support projects are calculated by multiplying the power generation two years prior (kWh) by the support unit price per power source (0.1 KRW/kWh).

The reduction of support funds is set based on the area-weighted average distance. This is the value obtained by dividing the sum of the areas of the standard areas multiplied by the distance from the power plant to the nearest coastal point of the standard area by the total area of each standard area.

Support funds are given 100% for 0~16km. For over 16km to 20km, 84% is given; over 20km to 25km, 64%, and so on. If it exceeds 40km, it becomes 0%.

Source: Ministry of Trade, Industry and Energy

If two or more local governments are included in the surrounding area, the 'proportion of fishing vessels that can conduct fishing activities in the power plant installation waters' will be newly included as 40% of the local government support fund distribution criteria.

The distribution ratios for area and population will be reduced, and the weighting for distance will be considered to strengthen support for areas closer to the power plant.

An official from the Ministry of Trade, Industry and Energy said, "With the amendment to the enforcement decree, the scope of surrounding areas and distribution methods suitable for the characteristics of offshore wind power will be newly defined, enabling support for the smooth promotion of offshore wind power projects." He added, "It is also expected to contribute to achieving the goal of supplying 12GW of offshore wind power by 2030 according to the 'Renewable Energy 3020 Implementation Plan.'"

The government's "Renewable Energy 3020 Implementation Plan" announced in December 2017. (Source: Ministry of Trade, Industry and Energy)

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