Investment in KEPCO Distribution Lines Surges by 3.5 Trillion Won Driven by Renewable Energy...

Surge in Small-Scale Renewable Energy Operators... KEPCO Distribution Equipment Demand Also Rising
KEPCO's Burden to Reach '3.5 Trillion' by 2031... Already Invested 1 Trillion
"Public Distrust Due to Solar Power Corruption... Renewable Energy Support Must Be Thoroughly Reviewed"

Seoul Jung-gu Korea Electric Power Corporation Seoul Headquarters. [Image source=Yonhap News]

[Asia Economy Sejong=Reporter Lee Jun-hyung] Korea Electric Power Corporation (KEPCO) has spent about 1 trillion won on the construction of distribution lines for small-scale renewable energy producers. KEPCO expects an additional 2.5 trillion won to be required for distribution line construction by 2031. Concerns are rising that the rapid expansion of renewable energy may be increasing KEPCO's deficits.

According to data submitted by KEPCO to the office of National Assembly member Han Mu-gyeong of the People Power Party on the 21st, KEPCO has invested approximately 978 billion won since 2016 to build distribution lines for renewable energy generation facilities under 1MW. During the same period, KEPCO approved the construction of 475 distribution lines to support small-scale renewable energy expansion. Of these, 328 have already been completed, and the remaining 147 are under construction.

KEPCO is increasing distribution lines due to its obligation to expand the power grid in response to the spread of small-scale renewable generation facilities. The government implemented the 'Small-scale Renewable Generation Connection Guarantee System' in October 2016. This system guarantees the connection of renewable generators with a capacity of 1MW or less to the power grid by requiring KEPCO to expand shared transmission and distribution facilities when the existing grid capacity is insufficient. Accordingly, KEPCO is obligated to construct distribution lines upon application by small-scale renewable energy producers.

Small-scale renewable generators under 1MW are mainly solar power plants. This explains why applications for small-scale renewable energy projects have concentrated in regions with high sunlight exposure. Specifically, Jeollanam-do and Jeollabuk-do had the highest number of applications nationwide, with 28,661 and 20,594 cases respectively. They were followed by Gyeongsangbuk-do (19,720 cases), Chungcheongnam-do (15,533 cases), and the Seoul metropolitan area (10,141 cases). Jeju, known as a 'renewable energy mecca,' recorded only 1,863 cases.

The situation is similar when looking at generation capacity. The generation capacity of renewable generators under 1MW applied for in Jeollabuk-do and Jeollanam-do was 3,865MW and 4,200MW respectively, accounting for 45.2% of the total generation capacity (17,858MW). In Gyeongsangbuk-do, which had a similar number of applications as Jeollanam-do, the applied generation capacity was 2,757MW.

The problem is that the obligation to expand distribution lines could further worsen KEPCO's financial structure, which is already in a 'deficit trap.' In fact, KEPCO analyzed that an additional 2.48 trillion won will be required for distribution line construction for small-scale renewable energy producers by 2031. During this period, KEPCO must build 1,240 new distribution lines. Considering the government's plan to steadily increase the share of renewable energy generation beyond 2031, KEPCO's burden is expected to grow accordingly.

There are also calls for the government to be more cautious in supporting renewable energy producers. Assembly member Han stated, "Public distrust in renewable energy policies is growing as solar power scandals from the previous administration have been revealed," adding, "Careful design of renewable energy support policies is necessary to prevent waste of taxpayers' money."

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