Government Declares Major Shift to Renewable Energy, but Practical Limitations Remain Evident

Plan to Build Gigawatt-Scale Solar Belt in Seoul Metropolitan, Chungcheong, and Gangwon Regions
Renewable Power Generation Costs Targeted to Undercut LNG
Funding, Grid, and Intermittency Solutions Remain Unresolved
"Right Direction, But Wit

Yonhap News Agency

Amid an energy security crisis triggered by the Middle East war, the government has officially declared renewable energy as the 'main power source' and unveiled an ambitious blueprint for a large-scale energy transition. While it has set record-high targets—100GW of renewable energy by 2030 and renewables accounting for over 30% of power generation by 2035—critics point out that the specifics of grid expansion and financing remain unresolved challenges.

According to the Ministry of Climate, Energy and Environment on May 20, the "First Basic Plan for Renewable Energy," formulated at the 38th Energy Committee meeting, focuses on five main pillars. These include establishing gigawatt-scale solar power complexes in the Seoul metropolitan area, Chungcheong, and Gangwon regions, and expanding solar deployment by utilizing idle lands for agrivoltaic and floating solar projects. The plan also aims to elevate renewables to the level of a main power source by integrating ESS (energy storage systems), overhaul the RPS system toward a long-term fixed-price contract market to lower generation costs, and foster domestic industry growth.

Specifically, the government plans to build gigawatt-scale solar parks totaling 12GW in the Seoul metropolitan, Chungcheong, and Gangwon regions. Large-scale solar complexes will be established in areas such as Siwha and Hwaong districts, Pyeongtaek Port and Lake, reclaimed land in Taean and Seosan, Cheongpung Lake, sites of decommissioned coal power plants, and border areas. A "Peace Solar Belt" is also planned for the border region between Gyeonggi and Gangwon provinces.

The government explained that these areas are close to power demand centers and offer relatively more grid capacity, reducing the burden on transmission networks. Through the "four key policy sites"—industrial complex and factory rooftops, agrivoltaic and floating solar, roads, railways, agricultural and water channels, as well as schools and parking lots—it aims to add 44.2GW of solar installations by 2030 and further expand balcony solar systems to 2 million apartment households.

The government has also set a goal of reducing the cost of renewable power generation to below LNG by 2035. The solar contract price is to be lowered from the current 150 won per kWh to less than 80 won by 2035, and offshore wind from 330 won to less than 150 won. To achieve this, the RPS system will shift toward a long-term fixed-price contract model and competitive bidding will be used to drive prices down. Additionally, to restore the domestic solar and wind industry ecosystem, the annual solar module production capacity will be expanded to over 10GW, wind turbine capacity to over 3GW, and the proportion of domestically produced equipment will be increased.

The government cited the deepening energy security crisis following the Middle East war as the background for this plan. The rationale is that the country must move away from a strategy centered on diversifying crude oil and gas imports and instead increase the share of home-grown energy. The plan notes that "the key objective of energy security is shifting toward minimizing imports."

The plan also has a strong industrial strategy component. The government stated its intent to develop renewables into "the next semiconductor and shipbuilding industry." It aims to expand domestic solar module production to over 10GW per year and wind turbine production to over 3GW per year, and foster next-generation solar cells and floating offshore wind as future growth engines.

However, some argue that the plan is overly "target-oriented." The government itself acknowledged in the basic plan that the current spread of renewables is hampered by various regulations and insufficient grid infrastructure. For example, under the Fifth Basic Plan, the 2024 target for the share of renewables in power generation was 11.4%, but actual performance reached only 9.1%. Previous plans also failed to meet targets, and the new plan's goals are set even higher, raising doubts about feasibility.

The greatest limitation cited is the grid issue. For renewables, securing transmission and distribution networks is more critical than building power plants. Currently, parts of the Seoul metropolitan area and Honam region are already nearing grid saturation. The government also assessed that "expanding renewable energy capacity is constrained by prolonged grid reinforcement investments and lengthy connection procedures." Yet, the current plan is criticized for lacking concrete measures to accelerate grid expansion and secure funding.

Cost competitiveness is also a challenge. The government acknowledged that the domestic price of renewable energy is 2.2 times higher than the global average for solar and 3.2 times higher for onshore wind. Surging REC prices, permitting costs, and expenses related to local acceptance have all contributed to market distortion. While the government proposes to lower prices through expanded long-term contracts and joint procurement, many in the industry remain skeptical about the practicality of these measures.

Concerns have also been raised from an industrial ecosystem perspective. While the government claims that expanding renewables will foster domestic industry, in reality, the competitiveness of domestic companies has weakened due to the influx of low-priced Chinese products. According to the plan, the share of domestic solar module usage fell from 72.5% in 2018 to 41.6% last year. This means that increased deployment may not directly translate into growth for domestic manufacturers.

The Green Transition Research Institute, a private climate policy think tank, commented, "The direction is right, but the implementation design remains questionable." The institute positively evaluated the government's first-ever presentation of concrete targets—100GW by 2030 and over 30% generation share by 2035—along with site plans, but criticized the lack of detailed strategies for investment sources, financing, and expansion of ESS and pumped storage to address renewable intermittency.

The institute also lamented the absence of citizen-oriented deployment strategies, measures to strengthen local government authority, and green industry promotion and export strategies. It stated, "The renewable energy transition is not something the market will do on its own; it must be led by the public sector and jointly built with local communities. If these gaps are not filled, even the most ambitious plan could again end up as the most disappointing one."

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