Gwangju City Designated as Regulatory Free Zone for Green Energy ESS Power Generation

Published 13 Nov.2020 17:13(KST)

Updated 19 Aug.2025 19:38(KST)

Gwangju City Hall

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] The ‘Gwangju Green Energy ESS Power Generation Regulatory Free Zone’ has been finally designated by the Ministry of SMEs and Startups.

The Gwangju Metropolitan City announced that the ‘Gwangju Green Energy ESS Power Generation Regulatory Free Zone’ was finally approved on the 13th at the Regulatory Free Zone Committee meeting chaired by Prime Minister Chung Sye-kyun.

The regulatory free zone system of the Ministry of SMEs and Startups is a regional innovation growth system where private companies, etc., can develop new technologies and expand opportunities for new business entry free from regulatory constraints in designated special zones. Once designated as a special zone, relaxed regulations are applied and national funding is provided for demonstrations.

During the designation process of the regulatory free zone, Gwangju received high evaluations for having optimal conditions to flexibly respond to innovative new businesses through the Korean Green New Deal policy alignment and the Gwangju-type AI-Green New Deal policy.

With this designation, Gwangju City has secured the momentum to lead regional innovation growth by promoting demonstrations related to new energy industries to achieve the goal of ‘realizing an energy self-sufficient city by 2045,’ thereby preoccupying new markets and creating quality jobs.

The special zone will be applied to a 2.5㎢ area in the Buk-gu Advanced Industrial Complex, and a total budget of 19.5 billion KRW (including 11.1 billion KRW in national funds) will be invested from next year through 2024 for a demonstration project of power trading based on renewable energy ESS.

Businesses participating in the special zone are allowed four demonstration exceptions: ▲construction of electric storage system (ESS) power plant infrastructure ▲control of ESS power plants ▲operation of a big data-based comprehensive ESS power generation operation control room ▲power trading targeting electric vehicle charging stations and public buildings. This provides opportunities to develop large-capacity ESS power plant operation technologies and new business entries through direct power trading.

This special zone project plans to install and operate large-capacity electric storage systems (ESS) to aggregate scattered solar power generation within the industrial complex. It is expected to contribute to the local economy through new job creation and investment attraction by revitalizing local solar power and ESS businesses via generalization of this business model in the future.

In particular, the ‘Gwangju Green Energy ESS Power Generation’ regulatory free zone will conduct the nation’s first demonstration project selling renewable energy production power to electric vehicle charging stations or public buildings.

In Korea, Korea Electric Power Corporation (KEPCO) currently manages most power grid-related services directly, making it difficult to form a private-centered market. However, through this regulatory free zone, it is expected that the renewable energy trading market will be activated by developing private-centered service industries such as the expansion of electric buses and electric vehicles.

Since Gwangju City is building a large-capacity ESS power plant, it plans to operate the demonstration project with safety as the top priority. Additionally, through continuous promotion, it aims to spread citizens’ understanding and consensus and smoothly proceed without problems in all aspects including safety and environment, thereby enhancing the effectiveness of the regulatory free zone.

Mayor Lee Yong-seop said, “Our Gwangju has been designated as a special zone as a result of many efforts to proactively respond to the climate crisis and foster future and green industries through the realization of the Gwangju-type AI-Green New Deal.” He added, “This designation provides an opportunity to realize a renewable energy self-sufficient city by 2045, and enables our companies and citizens to commercialize a business model where they can buy and sell electricity they produce themselves.”