South Korea's US$747 Billion Energy Transition Plan

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

The South Korean government has unveiled a plan to target 100 gigawatts (GW) of renewable energy by 2030 as part of a wide ranging energy transition plan.

South Korea wants to have 100 gigawatts (GW) of renewable energy in place by 2030 as part of a 1,000 trillion won (US$747 billion) energy transition and decarbonisation strategy through 2035. 

The Korean Green Transformation (K-GX)

The goal is to expand renewable power by overhauling the grid and transforming key heavy industrial sectors using green technology to create new economic drivers of growth. The 100-GW target forms a key part of Korean Green Transformation (K-GX), a strategy unveiled by the government to capitalize on emerging green technologies to make South Korea a leading user and supplier for industries abroad. According to Industrial Info Resources data, there are 557 renewable energy projects in South Korea worth US$239 billion in investment. The list is dominated by wind farm projects, which account for almost US$190 billion in potential investment, followed by solar power and hydropower at US$21 billion each. Official figures put South Korea's renewable capacity at around 37 GW today, with solar power making up the vast majority at more than 31 GW. 

The Government Take

"We must move away ​from the practice of chasing others and become architects and leaders of the green market ourselves," said President Lee Jae Myung, launching the K-GX strategy. "The green transition is a sure strategy for the future that will secure international competitiveness while protecting people's lives and livelihoods from the climate crisis."

Changes to the Grid

Upgrading the grid will be the key to renewable energy growth. This will include the construction of high-voltage direct-current (HVDC) transmission lines and swapping out existing transmission cables with higher-capacity ones. South Korea's Ministry of Climate, Energy and Environment said that by 2030 transmission-side capacity will increase from 119 GW to 171 GW, while distribution-side capacity will rise from 84 GW to 110 GW.  Battery energy storage systems (BESS) will be used to expand renewable energy grid connection capacity. Where solar power generation exceeds grid capacity, South Korea will introduce a "flexible grid connection" mechanism to temporarily limit power generation when necessary.  Effective immediately, renewable energy generation projects will be given priority over coal-fired and liquefied natural gas (LNG) power generation projects in new renewable energy grid connection assessments. This will allow regions such as Yeongnam and Gangwon, where thermal power generation is concentrated, to absorb an additional 20 GW of renewable energy by 2030.

A Green Industrial Push

The K-GX calls for the decarbonisation of the country's five highest-emitting industrial sectors: steel, petrochemicals, refining, cement, and semiconductors and displays. The government wants to lead the global green steel market by becoming the first country to mass-produce hydrogen-reduced steel, with a stated goal of having a 300,000 T/yr hydrogen-based steelmaking facility running by 2030. Industrial Info Resources is tracking the pilot project by POSCO at the Pohang Integrated Steel Mill and another demonstration project by Hyundai Steel Company Limited at the Dangjin Integrated Steel Mill Complex. Subscribers can view details on both projects here. 

In  petrochemicals, the government wants to develop technology to allow for electric naphtha cracking, as well as boost the use of low-carbon fuels and feedstocks. It also wants to foster 10 key green industries: electric vehicles (EVs), batteries, solar power, wind power, small modular reactors (SMRs), power equipment, power semiconductors, heat pumps, hydrogen, and carbon capture, utilisation and storage (CCUS). It will offer support to climate-tech startups and aid to "super-gap" technologies, which means to make them unassailable market leaders. The government wants to commercialise next-generation tandem solar cells by 2028 and build domestic supply chains for key clean-energy technologies. As a key supplier of EVs and batteries, South Korea is aiming to increase its share of the global EV market from the current 3.8%, or eighth place, to third by 2035. At home, EV subsidies will be increased and it is aiming for electric and hydrogen vehicles to account for more than 70% of new vehicle sales by 2035. Additional subsidies will be granted for EVs made with low-carbon steel.

Key Takeaways

• South Korea wants to have 100 gigawatts (GW) of renewable energy in place by 2030 as part of a wider green transition.
• It plans to spend US$747 billion over the next decade to support a wide-ranging green transition plan.
• Industrial Info Resources is tracking 557 renewable energy projects in South Korea worth US$239 billion in investment. 

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).