Relaxation of Participation Requirements for Third-Party Power Trading Contracts... "Expected to Enhance Convenience of Renewable Energy Transactions"

The Ministry of Trade, Industry and Energy announced on the 27th that, after consultations with the Regulatory Innovation Promotion Team of the Office for Government Policy Coordination, it will promulgate and implement on the 28th the revised guidelines on third-party power purchase agreements (PPAs) for renewable energy generation, which relax participation requirements for third-party power trading contracts and reduce the burden of electricity purchase costs for companies.

Unlike the direct power purchase agreement (PPA) system, which trades renewable energy power through renewable energy electricity suppliers, the third-party PPA system is a scheme where renewable energy power producers and Korea Electric Power Corporation (KEPCO), as well as KEPCO and electricity users, each enter into power supply contracts through KEPCO’s mediation to trade renewable energy.

This revision focuses on enhancing consistency between the systems by aligning the standards and conditions with those of the direct PPA introduced in September last year. The scale of electricity users eligible to participate in the third-party PPA, which was originally limited to those exceeding 1MW, has been relaxed to allow electricity users with 300kW or more to participate, considering corporate demand, similar to the direct PPA. Additionally, like the direct PPA, multiple electricity users can jointly enter into contracts, making it easier for small and medium-sized enterprises (SMEs) and mid-sized companies with smaller electricity consumption to find contracting partners.

Furthermore, the procedures requiring review by the Electricity Committee and approval by the Ministry of Trade, Industry and Energy for contract conclusion and changes have been simplified to a notification process to the Ministry. When there is an agreement among participants, if the generated power exceeds the consumption, the surplus electricity can be sold by the power producer in the electricity market, thereby reducing the burden on electricity users.

With this revision of the third-party PPA guidelines, the Ministry expects that the threshold for third-party power trading will be lowered, satisfying the diverse power trading demands of companies. The Ministry plans to continuously monitor companies’ difficulties even after the guideline revision and support domestic companies to ensure they have no difficulties in using renewable energy electricity.

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