Chapter 5 Chapter 5
1. Reduction Potential from RE Dissemination Support
According to the Korean New Deal website, among the KGND projects, three ministries, MOTIE, the Ministry of Agriculture, Food and Rural Affairs (MAFRA), and the Ministry of SMEs and Startups (MSS), are promoting the project to disseminate RE facilities. Out of the ministries, MOTIE's business is the largest in proportion and scale. Therefore, we calculated the reduction potential based on the dissemination projects promoted by MOTIE. Among the ministry's various projects related to the expansion of RE dissemination, the KGND projects include RE dissemination and financial (loan) support. We estimated the potential for facility dissemination and GHG reduction by referring to the RE dissemination support projects with available budget allocation details and performance data.
The RE dissemination support project subsidizes the cost of housing, buildings, and RE facilities in the area. This project has been in operation since 2014. Tasks of the project include support for housing units, buildings, convergence, regions, follow-up management, one-stop service platform establishment, PV supply to public institutions, and the implementation of ESS safety measures. Among them, six tasks are included in the KGND except for support for PV supply to public institutions and support for implementing ESS safety measures. The follow-up management for housing and buildings is carried out through mandatory follow-up management, failure receipt/support, and a sample survey to confirm the facility utilization rate (MOTIE, 2021b). And the establishment project of the one-stop service support platform is to provide customized information necessary for the preparation of the RE power generation project and to support one-stop service related to online administration for the entire cycle (KEA, 2021a). These two
projects were excluded from the calculation of GHG potential because they were not for the supply of RE facilities.
Table 5-1 shows the detailed budget of the renewable energy supply support project. For the budget up to 2021, we checked the MOTIE's budget and description of fund management plans (MOTIE, 2021b). For the 2022 budget, refer to the 2022 performance plan for each department attached to the National Assembly budget (Government of Korea, 2021b). The total budget of the RE dissemination project was 347.5 billion KRW in 2020 and slightly decreased to 313.3 billion KRW in 2021. The budget for 2022 is set at 321.4 billion KRW, an increase of 2.6% compared to 2021.
In 2021, the convergence support project accounted for 50.3 % (157.7 billion KRW) of the total budget. This project supports the convergence of complementary energy sources such as PV and wind power in considering regional characteristics. It also aids district complexes (including housing, commercial, and public units) projects. Local governments or public institutions, equipment manufacturing, and installation companies form a consortium and participate in the convergence support project (KEA, 2021a).
We assumed that the composition of each project in 2021 in the budget from 2023 to 2025 would remain the same. Accordingly, we applied the budget growth rate between 2021 and 2022 to the detailed project budget for 2021. As a result, it was estimated that the total budget of the RE dissemination support project in 2025 would increase to 347 billion won. We predicted that the subsidy for facility supply would amount to KRW 344.7 billion, or 99.3% of the total budget. These budget estimates, budget allocation status by energy source, and performance became the basis for budget estimation for specific projects and facility supply by energy source.
Table 5-1. Current (2019-2022) and Prospective (2023-2025) Budgets of RE Dissemination Support Projects
(Unit: million KRW)
Source: Created by the authors referring to MOTIE (2021b), Government of Korea (2021b) and KEA (2021a)
1.1. Housing Support Projects
The RE housing support projects aids the installation of RE facilities such as PV, solar, geothermal, small wind power, and fuel cells in detached and apartment (public) housing units. The amount of support is 50% of the total project cost (70% for fuel cells) (MOTIE, 2021b). In 2020, the government provided 85 billion KRW in RE facility subsidies through the housing support project. PV installations received the most support (69.57 billion KRW, 82.7 MW), followed by solar and geothermal supply (Table 5-2).
According to MOTIE’s announcement of RE dissemination support project (for housing) in 2021, the budget for each energy source for that
Projects Current Prospect
2019 2020 2021 2022 2023 2024 2025
Housing Support 38,572 85,000 65,000 66,679 68,402 70,169 71,982 Building Support 66,428 65,000 78,540 80,569 82,651 84,786 86,976
Convergence
Support 63,500 112,200 157,700 161,774 165,953 170,241 174,639 Regional Support 26,000 16,000 10,000 10,258 10,523 10,795 11,074
Follow–up
management 500 600 700 718 737 756 775
One-stop Service
Platform 1,000 3,800 1,400 1,436 1,473 1,511 1,550
PV Dissemination Support for
Public Institutes 71,000 64,968 - - - - -
Support for Implementing
ESS Safety Measures
7,870 - - - - - -
Total 274,870 347,568 313,340 321,435 329,739 338,258 346,997
year was 49.5 billion KRW for PV, 4.9 billion KRW for solar heat, 7.7 billion KRW for geothermal heat, 1.68 billion KRW for fuel cells, and 200 million KRW for small wind power (MOTIE, 2021a). In the case of small wind power, there has been no support for the past 5 years: the related budget was included in the fuel cell budget. Based on this information, we calculated the share of subsidies for each energy source in 2021 and multiplied the result by the total budget by year in Table 5-1. We estimated the budget for each energy source for the housing support project from 2021 to 2025 with the figures obtained in this way.
In addition, we calculated the total project cost by reflecting the support ratio by energy source (PV, solar heat, geothermal 50%, fuel cell 70%) (Table 5-2).
To estimate the size of facility supply based on the annual and energy source support budgets, we calculated the subsidy per unit facility (1,000 KRW/kW, 1,000 KRW/m2) by referring to the 2020 supply support performance. According to the project announcement for each year, facility types were subdivided according to their characteristics and size related to each energy source, reflected in the support unit price for each energy source and each detailed facility differently every year. It was impossible to apply the support unit price for each energy source and facility because it was not known how much was supported for each facility by energy source. Instead, we calculated the average subsidy per unit facility based on performance. As a result, we predicted the supply scale by applying unit prices of 841,000 KRW/kW for PV, 584,000 KRW/m2 for solar heat, 631,000 KRW/kW for geothermal heat, and 15,576,000 KRW/kW for fuel cells.
Table 5-2. Prospective Dissemination by Energy Source for Housing Support Projects
[Unit: MW (excluding solar heat), 1,000 rf (solar heat), 100 million won]
Note: 1) 'Others' refers to the budget required to confirm the dissemination support. This amount is included in the total grant but excluded from the total project cost.
2) 'Cumulative (dissemination)' is calculated from 2020 when the Green New Deal project begins.
3) 'Total projectroject cost' includes the project cost that the project applicant must pay separately from the government subsidy.
Sources: Created by the authors referrign to KER (2021b) and MOTIE (2021a)
Through the RE housing support project, 65.2 MW of solar power, 9,300 m2 of PV, 13.5 MW of geothermal heat, and 0.121 MW of fuel cells are expected to be supplied in 2025. The cumulative dissemination from 2021 to 2025 will be 309.8 MW for PV, 44.2 m2 for solar heat, 64.3 MW for geothermal heat, and 0.6 MW for fuel cells.
Types Performance Prospect
2019 2020 2021 2022 2023 2024 2025
PV
annual 46.0 82.7 58.8 60.4 61.9 63.5 65.2
cumulative - 82.7 141.5 201.9 263.8 327.3 392.5
grant 258.8 695.7 495.0 507.8 520.9 534.4 548.2
Solar Heat
annual 8.6 12.1 8.4 8.6 8.8 9.1 9.3
cumulative - 12.1 20.5 29.1 37.9 47.0 56.3
grant 45.2 70.8 49.0 50.3 51.6 52.9 54.3
Geo-thermal
annual 11.9 9.7 12.2 12.5 12.9 13.2 13.5
cumulative - 9.7 21.9 34.5 47.3 60.5 74.0
grant 56.0 61.4 77.0 79.0 81.0 83.1 85.3
Fuel Cells
annual 0.054 0.033 0.109 0.112 0.115 0.118 0.121
cumulative - 0.033 0.142 0.254 0.369 0.487 0.608
grant 10.1 5.1 17.0 17.4 17.9 18.4 18.8
Others confirmation 11.8 17.0 12.0 12.3 12.6 13.0 13.3
Total Grant 381.9 850.0 650.0 666.8 684.0 701.7 719.8
Total Project Cost 734.5 1,663.0 1,266.3 1,299.0 1,332.6 1,367.0 1,402.3
1.2. Building Support Projects
RE projects for supporting buildings subsidize a part of the RE facility installation cost for all buildings except housing and buildings owned and managed by the state and local governments. The project supports 50% of the total project cost while providing up to 70% for fuel cells and BIPV (MOTIE, 2021b).20) As with the housing support project, we checked the support budget for each energy source from the 2021 project announcement. Referring to the data, we derived the proportion of the support budget for each energy source. Assuming that the budget for support by energy source is the same every year, we multiplied this budget by the total budget by year in Table 5-1 to estimate the support budget for each energy source for the building support project from 2022 to 2025. BIPV, separately budgeted BIPV from 2021, was included in the PV support budget. As a result, we predicted that the total support budget for building support projects in 2025 would be 86.98 billion KRW. It is estimated that 51.6% of that, or 44.85 billion KRW, will be supported for PV and BIPV.
Like the housing support project, the building support project is divided into detailed facilities according to the size and energy source.
The support unit price is adjusted annually for each facility. However, there is no way to know how much each energy source will support each facility. Therefore, we calculated the subsidy per unit facility (1,000 KRW/kW, 1,000 KRW/m2) by referring to the 2020 performance and estimated the facility supply subsidy using these figures. Based on the subsidy in Table 5-3 and the support performance in Table 5-4, the result of calculating the subsidy per unit facility is 924,000 KRW/kW of
20) Building support projects include pilot dissemination projects to commercialize newly developed RE technology. Pilot dissemination projects are supported for up to 80% of the installation cost (KEA, 2021a).
PV, 609,000 KRW/m2 of solar heat, 831,000 KRW/kW of geothermal, 77,000 KRW/ kW of wood pellets, and 14,881,000 KRW/kW of fuel cells.
Table 5-3. Current and Prospective Budgets for Building Support Projects
(Unit: million KRW)
Note: 1) 'Others' include a PV tracking system, concentrating mining, wind power, and hydrothermal power. 'Total Project Cost' does not include pilot projects.
2) 'Total Project Cost' includes the project cost paid by the project applicants separately from the government subsidy.
Sources: Created by the authors referring to MOTIE (2021b), Government of Korea (2021b), and KEA (2021a).
According to KEA (2021b), the support performance by energy source for the building support project in 2020 includes wood pellets that are not specified in the project announcement. Therefore, we considered wood pellets as the other part of the support budget. We found that there was also support for small hydropower (10 kW) in 2020. However, among the support results by energy source, the support for other facilities could not specify the energy source, and the supported frequency21) was not high. For this reason, we did not reflect these figures in our forecasts. We also did not include pilot projects in our
21) According to KEA (2021b), the performance for supporting other facilities in building support projects includes support for solar power in 2010, hydrothermal energy in 2016, and small hydropower in 2020.
Projects Performance Prospect
2019 2020 2021 2022 2023 2024 2025
PV 14,400 28,750 30,000 30,775 31，570 32,386 33,222
BIPV 10,500 10,771 11,050 11,335 11,628
Solar Heat 5,123 5,573 5,250 5,386 5,525 5,667 5,814
Geothermal 3,710 4,327 4,000 4,103 4,209 4,318 4,430
Fuel Cells 5,000 4,950 18,200 18,670 19,153 19,647 20，155
Others 1,767 900 590 605 621 637 653
Pilot
Projects 5,000 5,000 10,000 10,258 10,523 10,795 11,074
Total Grant 35,000 49,500 78,540 80,569 82,651 84,786 86,976 Total
Project Cost 57,143 86,171 120,680 123,797 126,997 130,276 133,642
estimation of dissemination and total cost as we could not specify their energy sources.
As a result, we predicted the dissemination volume in 2025 as 48.5 MW of PV, 9,000 m2 of solar heat, 4.9 MW of geothermal heat, 5.6 MW of wood pellets, and 5.0 MW of fuel cells.
Table 5-4. Current Dissemination and Prospects by Energy Source in Building Support Projects
[Unit: kW (excluding PV), m2 (PV)]
Note: A = annual dissemination; C = cumulative dissemination
1) 'Others,' which means small hydropower, are excluded from the prospects because the supported frequency is not high.
2) The cumulative dissemination is calculated from 2020, when the Green New Deal project started.
Source: Created by the authors referring to KEA (2021b)
1.3. Convergence Support Projects
The convergence support projects help the convergence of complementary energy sources such as PV and wind power in considering regional characteristics. It also aids district complexes
Types Performance Prospects
2019 2020 2021 2022 2023 2024 2025
PV A 16,939 31,122 43,841 44,974 46,136 47,328 48,551
C - 31,122 74,963 119,937 166,073 213,401 261,952
Solar Heat
A 12,080 8,614 8,115 8,324 8,539 8,760 8,986
C - 8,614 16,729 25,053 33,593 42,353 51,339
thermalGeo-
A 4,541 4,813 4,449 4,564 4,682 4,803 4,927
C - 4,813 9,262 13,826 18,509 23,312 28,239
Wood Pellets
A 5,580 7,674 5,031 5,161 5,294 5,431 5,571
C - 7,674 12,705 17,865 23,159 28,590 34,161
Fuel Cells A 1,911 1,223 4,497 4,613 4,732 4,854 4,980
C - 1,223 5,720 10,333 15,065 19,919 24,899
Others A - 10
C - 10 -
(including housing, commercial, and public units) projects. Local governments or public institutions, equipment manufacturing, and installation companies form a consortium and participate in the convergence support project (KEA, 2021a).
Unlike the housing and building support project, the support budget for each energy source is not set for the convergence support project.
The support performance for each energy source varies according to the consortium's application every year. Accordingly, we calculated the share of aid by energy source for three years, from 2019 to 2021. Assuming that the proportion will remain the same from 2022 to 2025, we allocated the budget for the convergence support project in Table 5-1 by energy source. The size of facility dissemination was predicted from the subsidy per unit facility calculated based on performance from 2019 to 2021.
According to the support performance by energy source from 2019 to 2021, PV received the most support (217 billion won), followed by geothermal, solar, fuel cell, and wind power. For seawater heat, we identified only 4 cases applied in 2020. We recently discovered an application for ESS support, but we could not confirm the exact amount of facility supply. Accordingly, we excluded seawater heat and ESS from our facility supply forecast. Referring to the MOTIE (2021b) and the announcement of the demand survey for the convergence support project in 2021, we assumed that 50% of the total project cost would be supported for all energy sources while 70% would be provided for fuel cells.
In summary, we predicted that 121 MW of PV, 40MW of geothermal, 28,000 m2 of solar heat, 0.16 MW of fuel cells, and 0.15 MW of wind power would be disseminated in 2025 through the convergence support projects.
Table 5-5. Dissemination Performance and Prospects of Convergence Support Projects by Energy Source
[Unit: MW (excluding solar heat); 1,000 m2 (solar heat); 100 million KRW; %]
Types Performance Prospects
2019 2020 2021 ST2019-2021 2022 2023 2024 2025%
PV A 35 74 120 229 - 112 115 118 121
C - 74 194 - - 306 421 539 660
G 381 719 1,070 2,170 65.7 1,063 1,091 1,119 1,148
Solar Heat A 14 17 22 53 - 26 27 27 28
C - 17 39 - - 65 92 120 148
G 71 87 123 280 8.5 137 141 144 148
thermalGeo-
A 17 25 33 75 - 37 38 39 40
C - 25 58 - - 94 132 171 210
G 102 148 208 458 13.9 224 230 236 242
Fuel Cells A 0.01 0.15 0.14 0.30 - 0.15 0.15 0.15 0.16
C - 0.15 0.29 - - 0.44 0.59 0.74 0.90
G 1.92 28 22 51 1.6 25 26 27 27
Wind A 0.08 0.13 0.08 0.29 - 0.14 0.15 0.15 0.15
C - 0.13 0.21 - - 0.35 0.50 0.65 0.80
G 4.87 7.92 4.87 18 0.5 9 9 9 9
Sea Water
Heat GD -- 6.221.13 -- 1.136 -- -
ESS GD 2.92- -- 1.05- 4- -- -
Others DS/M 66 121 138 325 9.8 159 163 168 172
Total G 629 1,117 1,566 3,312 100.0 1,618 1,660 1,702 1,746
Total
Project Cost 1,127 1,964 2,845 5,933 - 2,902 2,979 3,055 3,133
Note: SB = subtotal; A = annual dissemination; C = cumulative dissemination; G = grant; D = dissemination; DS/M = design and monitoring
1) The share of performance is the percentage of the total grant by energy source from 2019 to 2021, excluding seawater heat and ESS.
2) 'Total project cost' excludes items for 'others (design, monitoring, etc.)' while including the project cost paid by the applicants separately from the government grant.
Source: Created by the authors referring to KEA (2021b)
1.4. Regional Support Projects
The region support project supports RE facilities installed in spaces owned or managed by local governments (KEA. 2021a). Like the convergence support project, this project does not set a support budget for a specific energy source. Instead, the composition of energy sources changes every year according to the business plan established by the
local government. As with the convergence support project, we forecast the scale of facility supply on the assumption that the proportion of support amount by energy source would be maintained based on the support performance in 2020. Based on support performance, energy sources with low application frequency and small scale were excluded from our projection.
From 2018 to 2020, small hydropower and fuel cell applications were applied only in 2019 and 2020, respectively. Therefore, we excluded these two energy sources from the facility supply forecast. We derived the share of the support amount for the remaining energy sources and multiplied each value by the expected amount of support for each year in Table 5-1 to estimate the amount of support for each energy source.
Next, we calculated the amount of support per unit facility by energy source based on the 2020 performance to forecast the amount of dissemination. As a result, in 2025, it is expected that 9.3 MW of PV, 650 m2 of solar heat, and 0.28 MW of geothermal will be distributed through regional support projects. According to MOTIE (2021b), only 45% of the total project cost is supported by the government for regional support projects. We calculated the ratio inversely to estimate the total project cost.
Table 5-6. Dissemination Performance and Prospects of Regional Support Projects by Energy Source
(Unit: MW (excluding solar heat); 1,000 m2 (solar heat); 100 million KRW; %)
Types Performance (PF) Prospects
2019 PF2020% 2021 2022 2023 2024 2025
PV
A 20.7 13.3 - 8.4 8.6 8.8 9.0 9.3
C - 13.3 21.6 30.2 39.0 48.0 57.3
G 248.5 151.2 95.3 95.3 97.8 100.3 102.9 105.5
Solar Heat A 0.68 0.94 - 0.59 0.61 0.62 0.64 0.65
C - 0.94 1.53 2.13 2.75 3.39 4.04
G 3.6 5.1 3.2 3.2 3.3 3.4 3.5 3.6
Small
Hydropower D 0.06 - -
G 2.5 - - -
Geothermal
A 1.06 0.40 - 0.25 0.26 0.26 0.27 0.28
C - 0.40 0.64 0.90 1.16 1.43 1.71
G 5.4 2.3 1.5 1.5 1.5 1.5 1.6 1.6
Fuel Cells D 0.0 - -
Others G 1.3 - -
Total G 260.0 160.0 - 100.0 102.6 105.2 108.0 110.7
Total Project Cost 577.8 355.6 - 222.2 228.0 233.9 239.9 246.1 Note: A = annual dissemination; C = cumulative dissemination; D = dissemination; G = grant
1) The share (%) of support amount by energy source in 2020 (%) means the percentage of total support amount for PV, solar heat, and geothermal excluding small hydropower, fuel cell, and others.
2) 'Total project cost' includes the project cost paid by the applicants separately from the government grant.
Source: Created by the authors referring to KEA (2020b; 2021b)
1.5. GHG Reduction Potential of the RE Dissemination Support Project
Table 5-7 summarizes the budget and facility supply prospects for each project and energy source of the RE dissemination support project.
We estimated that from 2020 to 2025, 1.89 trillion KRW of subsidies would be provided to disseminate RE facilities, and the total project cost would be 3.409 trillion KRW. Through this support, 1,372.2 MW of PV, 0.26 million m2 of solar power, 314.1 MW of geothermal, 26.4 MW of fuel cells, 0.8 MW of wind power, and 34.2 MW of wood pellets would be supplied over 6 years. Based on these projections, we calculated the GHG reduction potentials.
Table 5-7. Facility Dissemination and Prospects of RE Support Project by Energy Source
[Unit: kW (excluding solar heat); m2 (solar heat); million KRW]
Note: A = annual dissemination; C = cumulative dissemination Source: Created by the authors
We assumed that the electricity produced from PV, fuel cell, and wind power facilities contributes to GHG reduction by reducing the demand for fossil fuel-based electricity supplied to the power grid. Based on this assumption, we calculated the power generation potential by calculating each energy source's annual power production per unit (MW) using RE dissemination statistics. As of 2019, the cumulative installed capacity of PV (for self-generation) was 1,094.6 MW, and the total electricity production was 1,236,441 MWh. 1,130 MWh of electricity was generated per year per unit plant (MW). As for fuel cells (for self-generation), 4.8
구 분 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5
Dissemination
PV A 118,667 200,963 231,118 226,120 231,961 237,954 244,101 C - 200,963 432,081 658,201 890,162 1,128,116 1,372,217 Solar
Heat
A 35,462 38,864 39,166 43,662 44,790 45,947 47,134 C - 38,864 78,030 121,692 166,482 212,430 259,564 thermalGeo-
A 34,533 39,718 49,855 53,999 55,395 56,826 58,294 C - 39,718 89,573 143,572 198,967 255,792 314,086
Fuel Cells A 1,975 1,416 4,746 4,872 4,998 5,127 5,259
C - 1,416 6,162 11,034 16,031 21,158 26,417
Wind A 80 130 80 142 146 150 153
C - 130 210 352 498 647 801
Wood Pellets
A 5,580 7,674 5,031 5,161 5,294 5,431 5,571
C - 7,674 12,705 17,865 23,159 28,590 34,161
Total Grant 162,089 262,199 310,110 319,281 327,529 335,991 344,671 Total Project
Cost 307,455 497,730 552,641 567,288 581,943 596,978 612,400
MW was supplied by 2019, and 27,764 MWh of electricity was produced.
Annual electricity production per unit installation (MW) was 5,794 MWh.
Wind power facilities (for self-generation) have supplied 13.3MW by 2019, generating 9,695MWh of electricity. The annual electricity production per unit installation (MW) was 731 MWh (Table 5-8; KEA, 2020a).
In the case of solar heat, geothermal, and wood pellets, we assumed that related facilities contribute to GHG reduction by replacing fossil fuels used for heat production. Accordingly, using RE dissemination statistics, we calculated the average heat production per annual unit (MW) for each energy source and calculated the heat production potential using the results.
In the case of wood pellets, power generation and heat production facilities are distributed. Since statistics collect wood pellets data for power generation only for business use, we assumed that wood pellet facilities are not used for self-generation. Since the wood pellet facilities disseminated through the RE support project are for self-generation, not for power generation companies such as housing, buildings, and public institutions, we assumed they were all for heat production. By 2019, 1,918,209 m2 of solar heat facilities were supplied, and in 2019, they produced 26,912 toe of heat. The heat production per unit facility (m2) was 0.014 toe. As for geothermal facilities, 1,319.4 MW was supplied by 2019, producing 224,722 toe of heat in 2019. The heat production per unit facility (kW) was 0.1703 toe. By 2019, the cumulative supply of wood pellet facilities for heat production was 1,069.2MW (1,706 steam ton/h)22). The facilities produced 487,074 toe of heat in 2019, and the
22) In New & Renewable Energy Statistics, the plant capacity of wood pellets for heat production is expressed as 'tons of steam/hour.' The wood pellet supply performance of the new and renewable energy dissemination support project is provided in MW units. By applying the ton of oil equivalent (TOE) factor (0.0539 toe/ton) of steam and the thermal energy conversion method of electricity (1kwh=860 kcal) based on final energy consumption, the installed capacity of New & Renewable Energy Statistics is converted into MW.