89% of Manufacturing SMEs "Burdened by Electricity Costs"... 32% "Need Dedicated Tariff Plan"

Korea Federation of SMEs 'Energy Cost Burden Survey'
Over Half Say "Cannot Reduce Despite Electricity Rate Hikes"
Only 9.9% of Companies Participate in Government Support Programs

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Nine out of ten manufacturing SMEs expressed that industrial electricity rates are burdensome.

The Korea Federation of SMEs announced the results of the "Energy Cost Burden Survey" conducted from the 17th to the 27th of last month on 312 manufacturing SMEs on the 14th.

According to the survey, 88.8% of respondents currently feel burdened by industrial electricity rates, indicating that most manufacturing SMEs find electricity costs burdensome.

By response, 20.8% said "very burdensome," 36.2% "somewhat burdensome," and 31.7% "slightly burdensome."

Regarding the government's decision to freeze electricity rates for two consecutive quarters, 67.0% of companies responded that the "management stabilization effect is above average."

The policy most desired by manufacturing SMEs related to electricity rates was the "establishment of a dedicated rate system for small and medium manufacturing industries (32.1%)."

Next were "exemption from the power industry infrastructure fund charges for small and medium manufacturing industries (23.7%)" and "applying spring and autumn rates instead of summer and winter rates in June and November (19.2%)."

Regarding energy saving, 51.3% of companies responded that the industrial electricity rate increase is "at a necessary level and cannot be further reduced," while only 5.8% said they would "reduce consumption by the amount of the increase."

When asked about major difficulties, "the continued upward trend of industrial electricity rates (35.9%)" was the highest. Other responses included "unpredictable order patterns from clients (24.4%)" and "24-hour operation is unavoidable due to equipment characteristics (13.5%)."

Only 20.5% of companies planned to invest in energy-saving facilities to improve energy efficiency. Participation in government energy efficiency improvement support projects was also low at 9.9%.

Among 216 companies that did not participate in the government's energy efficiency improvement support projects, reasons given included "not knowing about the support policy or learning about it late (53.7%)" and "no necessary support policy (20.6%)."

Yang Chan-hoe, Head of the Innovation Growth Division at the Korea Federation of SMEs, stated, "The electricity rate freeze measure greatly helped SMEs overcome COVID-19," but added, "It is true that the overall industry’s sense of crisis has increased due to the prospect of electricity rate hikes caused by the transition of the power mix, including the expansion of renewable energy."

He continued, "As the pressure on power generation costs continues due to the government's carbon neutrality drive, it is necessary to introduce a dedicated rate system for SMEs, expand and promote support projects to minimize damage, and secure industrial competitiveness."

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