Companies Also Procure Renewable Energy Domestically... Introduction of Korea-style RE100

Energy Corporation Allows Subscription with Only 'Renewable Energy Usage Certificate'
Electricity Consumers Using Less Than 100 GWh Annually Allowed to Participate
Third-Party PPA Permitted to Enable Renewable Energy Transactions Between Consumers and Power Producers
Electricity Business Act Amendment Passed at Cabinet Meeting
Various Implementation Options Including Green Premium and REC Purchases Provided
RE20, 40, 60, 80, 100 Labeling Assigned... "For Corporate Marketing Use"

A panoramic view of the solar panels at the 'Solar City Solar Power Facility Complex' in Haenam-gun, Jeollanam-do, the largest solar power generation complex in South Korea. (Photo by Korea Energy Information & Culture Foundation)

[Asia Economy Reporter Moon Chaeseok] From this year, companies will be able to procure renewable energy domestically. Since using renewable energy can be recognized as a greenhouse gas reduction achievement, the burden on companies is expected to decrease.

The Ministry of Trade, Industry and Energy announced on the 5th that it will officially introduce the "Korean-style RE100 system (K-RE100)" including this content starting this year. RE100 is a campaign to procure 100% of electricity from renewable energy sources such as solar and wind power by 2050, with over 280 companies worldwide including Google and Apple participating.

Global companies are increasingly requiring their partners to use renewable energy, and the European Union (EU) and the United States are planning to implement Carbon Border Adjustments (CBA) measures. Due to such pressure, SK, the only domestic company approved to join the campaign, has been implementing RE100 only at overseas business sites. With the introduction of K-RE100, it is now possible to procure renewable energy domestically as well.

Unlike the global RE100, the Korean-style RE100 allows participation of electricity consumers with an annual electricity usage of less than 100 GWh (gigawatt-hours). Accordingly, both industrial and general electricity consumers who wish to purchase solar, wind, hydro, marine energy, geothermal energy, and bioenergy can participate in the Korean-style RE100 by registering with the Korea Energy Agency.

During the process of issuing a certificate by the Energy Agency, the system naturally verifies that the electricity consumer used renewable energy instead of nuclear, coal, or hydrogen fuel cells.

Source: Ministry of Trade, Industry and Energy

Renewable energy can be procured through five methods: ▲Green Premium system ▲Third-party PPA (Power Purchase Agreement) ▲Renewable Energy Certificate (REC) purchase ▲Self-generation ▲Equity investment.

The Green Premium system is a method of purchasing renewable energy by bidding and paying a premium to Korea Electric Power Corporation (KEPCO). The first bidding volume is a total of 170,827 TWh (terawatt-hours), and the bidding floor price is 10 KRW per kWh. KEPCO will accept Green Premium bidding participation announcements and applications from today until 6 p.m. on the 5th of next month. The winning bid volume and price will be confirmed on the 8th of next month, and the official contract will be signed on the 22nd of the same month.

An official from the Energy Agency explained, "At 10 KRW per kWh, it is about 3.5 times cheaper than the REC price of 35.5 KRW per kWh as of the closing price on the 31st of last month," adding, "However, purchasing renewable energy through the Green Premium system does not qualify as a greenhouse gas reduction achievement."

The third-party PPA is a system where companies and renewable energy power producers enter into power trading contracts mediated by KEPCO. Until now, direct power trading between power producers and companies was not possible. With the passage of the amendment to the Electricity Business Act at the Cabinet meeting on this day, power trading between these parties has become possible. Also, the purchase of Renewable Energy Certificates (REC) was previously only possible for power producers fulfilling the Renewable Portfolio Standard (RPS) system, but now companies can also purchase them.

The Energy Agency plans to build an RE100-dedicated REC trading platform and conduct a pilot project in the first quarter. Through this, after verifying the renewable energy usage performance submitted by companies, a "Renewable Energy Usage Certificate" will be issued. This certificate can be used to fulfill global RE100 commitments.

Source: Ministry of Trade, Industry and Energy

The government has decided to recognize companies as having purchased greenhouse gas emission permits once their renewable energy usage performance is confirmed, as soon as the Ministry of Environment completes the revision of its guidelines.

Also, if renewable energy accounts for at least 20% of total electricity consumption, a "labeling" indicating the use of eco-friendly electricity will be granted. Considering the reality that many companies do not immediately procure 100% renewable energy upon joining K-RE100, labeling will be provided in stages of 20%, 40%, 60%, 80%, and 100%.

An official from the Ministry of Trade, Industry and Energy said, "Companies will be able to attach labels to their products and use them for marketing in domestic and international markets."

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