SGC Energy, Hanwha Energy, and OCI SE Decide to Sunset REC Weight for Imported Wood Pellets
Expected Effect of Replacing Imported Wood Pellets Worth 1.6 Million Tons and 240 Billion KRW Annually
[Asia Economy Reporter Joo Sang-don] Three private companies in bio-cofiring power generation?SGC Energy, Hanwha Energy, and OCI SE?have agreed to sunset the Renewable Energy Certificate (REC) for imported wood pellets.
The Ministry of Trade, Industry and Energy announced that on the 1st, the three private companies and the Korea Energy Agency signed a memorandum of understanding in Gunsan reflecting this agreement.
The ministry expects that this agreement will have the effect of replacing 1.6 million tons annually, worth 240 billion KRW, of imported wood pellets used by the three private companies, while also revitalizing the domestic biomass industry.
Until now, the ministry has been working to improve the high fuel import dependency of biomass power plants using wood pellets and the excessive issuance of Renewable Energy Certificates (REC) compared to solar and wind power.
Accordingly, in June 2018, the cofiring weighting for new facilities was sunset, and in July 2020, the weighting applied to existing bio-cofiring facilities of power generation public enterprises was also reduced to encourage replacing imported wood pellets with unused domestic forest biomass.
Although the existing facilities of the three private companies still apply the existing weighting (1.0), through this agreement, they have voluntarily agreed to sunset the weighting and promised to switch to domestic fuel.
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Park Ki-young, Vice Minister of Energy at the Ministry of Trade, Industry and Energy, said, "To establish a foundation for switching to domestic fuel, the core of this agreement, we will prepare measures to activate the use of unused forest biomass and organic waste resources," adding, "In the mid to long term, we will induce a distributed bio-cofiring power generation system that uses biofuels produced locally."
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