'REC 80,000 Won' Soars... Government to Release National Supply as Early as Next Month

Administrative Notice of Amendment to the 'Renewable Energy Supply Obligation System'
Basis Established for Selling 'National REC' When Prices Rise Over 20%
"Aim to Increase Trading Volume for Price Stabilization"

As the price of Renewable Energy Certificates (REC) continues to surge beyond 80,000 won, the government has decided to revise related regulations to sell national RECs. The supply of national REC volumes is expected as early as mid-next month.

On the 20th, the Ministry of Trade, Industry and Energy announced that it will conduct a 20-day administrative notice period for the amendment of the "Renewable Energy Portfolio Standard (RPS) and Fuel Mixing Obligation System Management and Operation Guidelines (RPS Notice)" reflecting these changes.

An official from the Ministry explained, "With the increase in participation in the 'RE100' campaign, which aims to cover 100% of electricity consumption with renewable energy, REC demand has risen. However, due to high interest rates and inflation, the pace of renewable energy expansion has slowed, resulting in a shortage of REC trading volumes and rising prices. This amendment aims to create specific criteria for supplying national RECs to the market, thereby increasing REC supply and guiding price stabilization downward."

The current "Act on the Development, Use, and Promotion of New and Renewable Energy (New and Renewable Energy Act)" permits the trading of national RECs to regulate supply and demand and stabilize prices in the REC trading market. However, there are limitations in system operation due to the lack of detailed criteria regarding trading judgment standards, volumes, and procedures.

Accordingly, the Ministry of Trade, Industry and Energy and the Korea Energy Agency have revised related regulations such as the RPS Notice to allow national RECs to be auctioned and sold through a resolution of the RPS Committee when activation conditions are met, such as the previous month's average REC spot market price exceeding 120% of the previous year's average price. Additionally, an upper price limit will be set to provide market signals for appropriate market prices and to achieve the original purpose of price stabilization.

Once the amendments to the notice and other regulations are completed, the government plans to stabilize the REC spot market by selling national RECs according to the related procedures and criteria when the sale conditions are met.

According to the Renewable Energy One-Stop Business Information Integrated Portal, as of September this year, the average REC spot market price was 80,731 won, about 40% higher than the previous year, indicating a need for price stabilization. If the current price level is maintained, the activation conditions will be met, and national RECs could be supplied to the market as early as mid-next month.

An official from the Ministry stated, "In addition to national RECs, the Ministry plans to pursue various additional measures to stabilize the REC spot market prices. We will strive to create a healthy market ecosystem and promote renewable energy cost-effectively."

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