Jeju to Reduce 'Solar and Wind Power Generation Restrictions'... Promotes Large-Scale ESS Construction
Jeju ESS Bid Announcement
'Low-Carbon Power Central Contract Market' Opening
A large-scale energy storage system (ESS) facility aimed at stabilizing power supply and demand in the Jeju region and alleviating renewable energy output control issues will be officially introduced.
On the 18th, the Ministry of Trade, Industry and Energy announced on the 17th that it will open Korea's first low-carbon power central contract market, coinciding with the bidding announcement for Jeju's long-duration 'Battery ESS (BESS)'.
Until now, the need for ESS as a flexibility resource to contribute to grid stabilization and respond to the variability of renewable energy has been discussed. However, under the current power market system that compensates with a single price for the system marginal price (SMP), the practical deployment of the high-cost ESS was difficult. Accordingly, the Ministry of Trade, Industry and Energy decided to first introduce a long-duration ESS central contract market in Jeju Island, where grid saturation and renewable energy output control issues are deemed most urgent.
Power producers participating in this competitive bidding will construct and operate long-duration ESS facilities capable of operating for more than 4 hours and receive compensation at the bid price for 15 years. A ministry official stated, "By charging excess power and discharging when power is insufficient through ESS, we expect to stabilize the power supply and demand in Jeju, where the proportion of renewable energy generation with high variability is high, and also alleviate renewable energy output control issues."
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Meanwhile, the bid volume corresponds to the 65MW/260MWh (capacity capable of charging and discharging 65MW for 4 hours) ESS introduction target for 2024 under the 10th Basic Plan for Electricity Supply and Demand. This volume is required in the short term to stabilize the Jeju grid. The final successful bidders will be selected by the end of the year through a comprehensive evaluation of price indicators such as bid prices per business operator and non-price indicators including technical capability, fire and facility safety, and industrial and economic contributions.
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