S. Korea Pursues Renewables With Subsidy Offers

The South Korean government has announced aggressive plans to increase reliance on sustainable energy for 2010. Today, the government announced that it would offer renewable subsidiaries that could do away with 80% of the total cost for hydrogen fuel cells to replace natural gas to power and heat homes.

The subsidiaries will begin being offered in 2010, and by 2013 will reduce to cover just 50 percent of the hydrogen fuel cell systems, with a target goal to drop down to the government providing 30 percent of the overall cost by 2017. The subsidiary offers would then expire in 2020.

Today’s hydrogen fuel cells systems generally run about 50 million won, or $40,300, but with the help of government subsidiaries those costs could be lowered to 10 million won by 2015, and then halfed again to 5 million won by 2018. Currently South Korea relies on renewables for almost 2.5 percent of its energy, but less than 0.1 percent of that number is  achieved from fuel cells, solar, or wind. With the UN Climate Talks in Copenhagen scheduled for this coming December, many nations have been announcing more aggressive climate control policies. South Korea is no different, and has announced plans to reach 3 percent of electricity generated by renewables over the next three years.

Overall South Korea hopes to see their Renewable Portfolio Standard raised to 10 percent of electricity being retained from renewable energy by the year 2020.

The government is doing other things to help this goal along as well, including investing in a major wind farm outside Saemangeum, where wind energy is currently being tested. Wind energy is anticipated to provide a large portion of the renewable energy demand beginning in 2014.

Solar is expected to be a valuable market in the future as well, with many new companies springing up, and existing Korean energy companies beginning to invest more in the solar sector. The government is aiming for 100 MW of solar equipment to be installed by 2011. In 2008, JP Morgan predicted that South Korea would become on of the fastest growing solar industry producers over the coming four years.