Chapter 3 Chapter 3
2. Tasks in the Energy Sector of KGND 13)
2.1.1. Improving Energy Management Efficiency and Establishing an Intellig ent Smart Grid
Energy management efficiency improvement and intelligent smart grid establishment aim to prepare the diffusion of eco-friendly distributed energy systems, reorganize the power grid system to activate efficiency projects, and lay the foundation for the energy market. The tasks for this are largely divided into expanding the distributed system, establishing database for building energy diagnosis, and undergrounding power lines and cables.
A. Expansion of Distributed Energy System
Expanding distributed systems aims to build a consumer-oriented smart power grid and integrated control system, improve the power grid efficiency and diffuse the distributed power supply. MOTIE plans to promote 10 projects for these purposes (Table 3-2).
Expanding distributed systems includes decentralizing systems, developing infrastructures and operating systems, and technology R&D.
Examples of distributed system dissemination are home smart power platforms, eco-friendly microgrids in island areas, and public ESS construction to expand the system acceptance of RE. Developing infrastructures and operating systems is to build the basis of integrated renewable energy control systems (Table 3-2). Finally, the expansion of distributed systems includes various R&D projects. The future smart grid demonstration project builds a demonstration complex that grafts technologies like the Internet of Things (IoT) to the existing smart grid infrastructure. Standardization of new energy-related technologies supports establishing and revising electric power standards to ensure grid stabilization and interoperability. In addition, the certification
support project for new energy-related technologies is a project to develop a system that can test and certify the performance of products manufactured according to the standards. In addition, KGND will promote technology R&D to improve energy efficiency and demand management technology for each industry, building, and transportation sector, develop and demonstrate technology for the operation and maintenance of PV power plants, and improve old hydroelectric power generation systems. (Table 3-2).
As the need for stable management of the power grid has emerged along with the extensive dissemination of RE, the government has promoted specific tasks to expand distributed systems. The development and demonstration projects of public ESS, new energy technology standardization and certification system, RE integrated control system base, intelligent power plant platform, and PV intelligent integrated operation platform for enhancing the grid acceptance of RE all aim to manage the power grid stably.
Among the tasks mentioned above, most R&D-related tasks were performed before the government announced the KGND. The rest of the projects are being newly promoted according to the purpose of the KGND. The home smart power platform business was budgeted through the 3rd supplementary budget in 2020 and started in 2020. Construction of the RE integrated control system base, public ESS construction to expand RE system acceptance, performance improvement of aging hydroelectric power generation systems, and development of status diagnosis technology were newly added to the KGND from 2021 (Table 3-3).
Table 3-2. Detailed Tasks of Expanding Distributed System
Grid Detailed Tasks Summary
Smart Power Grid
Home smart power platform projects
- Providing related services by replacing watt-hour meters in 5 million apartment units with smart meters and installing communication facilities for watt-hour data transmission.
Future smart grid demonstration (R&D)
- Constructing a demonstration complex for the benefits of the 4th industrial revolution in urban areas by combining artificial intelligence, big data, and energy IoT technologies with the existing smart grid infrastructure and technology.
Energy demand management core
technology development projects
(R&D)
- Supporting technology development for equipment, process, and system efficiency and demand management for conversion to energy-efficient, low-consumption structure and fostering new industries.
- Supporting technology development for the industry, building, and transportation sectors.
Micro Power Grid
Establishment of an eco-friendly microgrid
for island regions
- Establishing eco-friendly power generation system based on RE and high-efficiency power generation technology to reduce air pollutant emissions from diesel engine generators in 42 island areas.
Stable Power Grid
RE core technology R&D (building an intelligent power plant platform)
- MW-scale solar power plant using 5G communication technology, remote intelligent O&M technology development and demonstration RE generation technology
R&D (intelligent PV power plant operation platform)
- Developing and demonstrating intelligent PV inverter system and digital O&M element technology for 1500V MW PV power plants.
New energy technology standardization and certification support
project (R&D)
- Supporting the establishment and revision of standards in the power sector to stabilize the power grid and secure interoperability according to the expansion of new and renewable sources.
- Supporting the establishment of a system to test and certify the performance of products manufactured according to the standards.
Public ESS construction project to expand the acceptance of
RE systems
- It is necessary to build a new ESS with enhanced publicity for system stabilization purposes to secure system stability and reliability due to the increase in RE.
Projects to build the foundation of the integrated RE control
system
- Stabilized power system operation through information sharing between new and renewable power generation companies, system
operation/transmission, and distribution management entities with the increasing share of RE generation
- Establishing information provision sites for renewable energy generators to set the integrated control system basis through real-time monitoring of RE output
Performance disagnosis and improvement technology R&D for aging
hydropower generation systems
- Localizing aging hydropower and fostering the hydropower industry ecosystem with the development of high-efficiency aberration power generation systems and ICT-based real-time condition monitoring/prediction diagnosis technologies for medium/large hydropower generation systems (these technologies have been largely dependent on overseas) Note: O&M = operation and maintenance
Source: Korean New Deal (2021)
Table 3-3. Tasks and Budgets for Expanding Distributed Systems
(Unit: 100 million KRW) Detailed Tasks 2015 2016 2017 2018 2019 2020 2021 Establishment of the
basis of the integrated
RE control system 60
Public ESS Construction Pro ject to Expand
RE System Acceptance 183
Home smart power
platform projects 282 976
Technology R&D for performance diagnosis and improvement of old h
ydropower generation systems
60
RE core technology R&D 2,131 2,163 2,038 2,079 2,154 2,595 2,839 Energy demand
management core
technology R&D 1,872 1,694 1,813 1,858 1,667 1,544 2,140 New energy technology
standardization and certification support
projects (R&D)
43 65 132 145
Future smart grid
demonstration (R&D) 68 81 54
Source: Open Fiscal Data (2021)
B. Establishing Database for Building Energy Diagnosis
Establishing a database for building energy diagnosis aims to provide integrated building energy use and energy-saving technical information.
Accordingly, MOTIE plans to build a database of building energy diagnosis information and promote a project to support mandatory diagnosis as a detailed task of KGND. Establishing a database of building energy diagnosis information is targeted for old private buildings with a total floor area of 1,000 m2 or more and used for more than 15 years.
The mandatory diagnosis subsidy covers 30% of the cost of energy
diagnosis for SMEs with an annual energy consumption of more than 2,000 toe and less than 10,000 toe.
C. Undergrounding Power Lines and Cables
As the demand for undergrounding power lines and cables to improve the environment around school commuting roads and secure safety in preparation for disasters such as wildfires and typhoons increases, MOTIE plans to promote the undergrounding work as part of KGND.
2.1.2. Supporting a Base to Disseminate RE and Just transition
The purpose of establishing a foundation for RE dissemination and supporting just transition is to promote core R&D and lay the foundation for extensive dissemination of RE to respond to climate change and realize a sustainable social and economic system. Detailed tasks include R&D and demonstration projects, loans and dissemination support, and just transition. R&D and demonstration projects aim to secure source technology to overcome technological limitations and expand distribution by nurturing an industrial ecosystem. These projects intend to expand RE dissemination by establishing related projects for loans and dissemination support. Finally, just transition supports industry transition in regions where the traditional industry would shrink due to energy transition (MOTIE and ME, 2020).
A. Core R&D and Demonstration Projecdts
The R&D and demonstration project will include 28 tasks related to PV (5), wind power (10), hydrogen (6), hydrothermal (3), LNG (2), ESS (1), and T&D (1). In particular, as the problem of acceptance of RE facilities makes it difficult to spread the spread of onshore PV and wind power, the importance of offshore wind power is growing in EU. Korea has also
raised the weight of offshore wind power REC from 2.0 to 2.5 to accelerate the dissemination of offshore wind power.14) What is described above also reflects this trend: 10 of the 28 tasks are related to wind power (Table 3-4).
Table 3-4. Tasks of R&D and Demonstration Projects
14) Gook-young Byun. "Offshore Wind Power's REC Weight Has Been Significantly Increased," Energy Daily (July 8, 2021) https://www.energydaily.co.kr/news/articleView.html?idxno二120426 (last accessed date: October 15, 2021).
Sectors Tasks Mini-
stries
PV
Constructing a comprehensive floating PV evaluation center (R&D) MOTIE RE core technology R&D (building-integrated solar cell technology
development) MOTIE
RE core technology R&D (PV) MOTIE
Establishing the foundation for empirical research on RE digital twin
and eco-friendly transportation MOTIE
Establishing a research center for the joint use of PV power
generation among companies (R&D) MOTIE
Wind
Supporting the public-led development of large-scale offshore wind
farms MOTIE
Digital offshore wind power map R&D MOTIE
Digital twin O&M technology R&D for floating offshore wind power MOTIE Building a foundation for super-large wind power demonstration MOTIE Constructing a nacelle test bed for wind power MOTIE Building joint connection facilities for offshore wind power (R&D) MOTIE Establishing a center to support the offshore wind power industry MOTIE Demonstration project for coexistence of offshore wind power
and fishery industry (R&D) MOTIE
Establishing the maintenance and logistics management system for
offshore wind power (R&D) MOTIE
Developing (R&D) and demonstrating a platform for the
integrated maintenance of offshore wind farms MOTIE H2 Technology R&D projects for green hydrogen production and
storage systems MOTIE
Note: DC T&D = direct current T&D; MOTIE = Ministry of Trade, Industry and Energy; MOLIT = Ministry of Land Transport and Maritime Affairs; ME = Ministry of Environment; MSS = Ministry of SMEs and Startups
Source: Korean New Deal (2021)
B. Supporting RE-related Loans and Dissemination
Supporting loans and dissemination for RE is to expand the supply of RE facilities through financial support. The main target of dissemination support is not power generation companies but users of self-generation such as general consumers, corporations, and public institutions.
Generators or RE-related industries receive loans and guarantee support in different ways. The government also plans to build RE power plants using the agricultural infrastructure. As most financing and dissemination support projects are associated with MOTIE, we reviewed the ministry's related projects (Table 3-5).
The RE dissemination support project aims to expand the supply of RE and foster related industries by supporting the installation cost of RE facilities in houses, buildings, and regions (MOTIE, 2021b). The RE
Supporting a hydrogen city MOLIT
MOTIE Building a foundation for the hydrogen industry promotion
Technology R&D for the hydrogen pilot city infrastructure MOLIT Establishing a foundation and reinforcing management for
hydrogen safety MOTIE
Technology R&D for hydrogen fuel cell-based 200 kg-cargo drones MOTIE
Hyro- thermal
Technology R&D for hydrothermal cooling & heating and
regenerative heat hybrid systems ME
Supporting the activation of hydrothermal energy (hydrothermal ME energy convergence cluster supply system)
MOTIE Technology R&D for river water heating & cooling and
renewable heat hybrid systems
LNG
Developing innovative technology related to high-temperature
components of gas turbines for LNG power generation MOTIE MOTIE Developing technology to build the standard gas combined
cycle power generation model and test bed
ESS Developing technology for High-reliability long-cycle RFB-ESS
(tens of MWh) MOTIE
DC T&D Jeonnam New Energy Industry Regulatory Free Zone MSS
dissemination support project consists of 6 tasks15) (housing, buildings, convergence, area, follow-up management, and one-stop service supports) (Table 3-5).
The housing support project supports the installation of RE facilities such as PV, solar heat, geothermal, small wind power, and fuel cell in detached/communal (public) houses, and 50% of the total project cost (70% for fuel cells) is supported (MOTIE, 2021b). The building support project subsidizes a part of the RE facility installation cost for all buildings except residential buildings (houses) and buildings owned and managed by the state and local governments. Building support projects also support 50% of the total project cost, but fuel cells and BIPV support up to 70% (Table 3-5).
15) 'Detailed projects' described in Article 3, Paragraph 1, Subparagraph 4 of the National Subsidy's Integrated Management Guidelines is a sub-unit of 'projects,' carrying out the notification of budgets, application for grant of subsidies, execution, and settlement under Article 12 of the Subsidy Management Act.
Table 3-5. Tasks for Loans and Dissemination Support Projects
Tasks M Highlights
RE Dissemination Support
housing
support - Supporting the installation cost of renewable sources in detached houses and multi-unit houses
building
support - Supporting the installation cost of renewable sources in all buildings except houses and local governments' buildings
convergence support
- Supporting two or more types of convergence projects between renewable sources and complex projects such as housing, and public/commercial buildings in specific areas
regional
support - Providing subsidies for the installation cost of renewable sources for buildings and facilities owned or managed by local governments follow-up
management
- Operating a repair support center and an after-sales company for follow-up management of facilities installed for the dissemination projects of renewable sources
one-stop
services - Constructing a platform to provide information to the public and integrated monitoring of licenses for local government power generation projects
RE Financial Support
production and facility funds
- Providing long-term and low-interest loans for RE production and power generation facilities with high initial investment costs.
- Facility Fund: Providing loans for installation and
construction costs to companies who want to install RE power generation facilities
- Production funds: Supporting companies that want to build or expand facilities for the production of RE generation facilities and exclusive products working funds - Providing SMEs with long-term and low-interest loans to support their
producing RE-related products new energy
industry - Providing long-term and low-interest financial support to reduce the initial investment cost and foster investment in the new energy industry
KOTEC-funded (Green Guarantee)
- Guarantee support preferentially for RE power generation business or related companies
Financing Eco-innovation
(Green Guarantee)
- Launching exclusive financial products that can expand companies' guarantee capacity by focusing on their technological capability and carbon value evaluation rather than creditworthiness or collateral capability
- For power generators and companies with RE technology
- Supporting loan guarantee based on 'carbon valuation (including corporate RE technology)' conducted by a specialized guarantee fund
Energy Development Using Agricultural
Infrastructure
- Projects to build renewable energy power plants using agricultural infrastructure managed by KRC
- Installing RE power plants such as PV on the reservoir's surface and idle sites and using the revenue as a financial source for facility repair and maintenance costs.
Note: M = ministries; MOTIE = Ministry of Trade, Industry and Energy; MSS = Ministry of SMEs and Startups; MAFRA = Ministry of Agriculture, Food and Rural Affairs; SMEs = small and medium-sized enterprises; KOTEC = Korea Technology Finance Corporation; KRC = Korea Rural Community Corporation. Source: Korean New Deal (2021)
The convergence support project promotes integration between complementary energy sources such as PV and wind power and regional complex (housing, commercial, and public) projects in consideration of regional characteristics related to RE dissemination (integrated support).
In addition, regional support projects support RE facilities installed in spaces owned or managed by local governments (Table 3-5; KEA, 2021a).
In addition, follow-up management for installed facilities through the supply support project, provision of information related to the RE power generation project, and one-stop service support (monitoring local government power generation project licensing) are provided (Table 3-5).
The RE financial support projects provide long-term, low-interest loans to users who want to install RE facilities and manufacturers of such facilities (MOTIE, 2021b). These projects include ① production and facility funds, ② working capital, and ③ new industrial loan support.
Users who want to install RE facilities can receive facility funds, and manufacturers who want to set up the machinery to produce RE-related products or facilities can receive production funds. In addition, SMEs with RE-related products can apply for loans to secure operating capital or liquidity (Table 3-5; KEA, 2021a). The new energy industry also encourages private investment through long-term, low-interest financial support (Table 3-5; MOTIE, 2021b).
C. Just Transition Projects
The just transition project supports the conversion of crisis areas, such as coal power plants, to the RE industry (MOTIE and ME, 2020). MOTIE is promoting 5 tasks related to just transition. The task that best fits the purpose of just transition is green innovation finance (resident participation fund). The remaining four tasks do not completely meet the original purpose of supporting crisis areas following the energy
transition. Still, they are meaningful enough to support the vulnerable, economically depressed areas and industries (Table 3-6). On the other hand, local energy-saving projects reveal areas that may face crises in energy conversion. Research services are currently underway to prepare policies that can systematically respond to these problems. Based on these research results, the government should develop tasks more suited to just transition.
Table 3-6. Tasks of Just Transition Project
Tasks Highlights
Financing Eco-innovation
(resident participation funds)
- Providing long-term and low-interest loans for the investment of residents near power plants who wish to participate in PV and wind power generation projects.
- Resident Participation Fund: A business model to allow power generation companies and residents to share power generation profits and increase public acceptance (in the form of equity, bonds, funds, etc.) by
encouraging investment by residents near PV and wind power plants - Targeting solar (500 kW or more) and wind (3 MW or more) power
generation and providing additional REC (0.1~0.2) based on the resident participation rate.
Installing Energy-saving Facilities (loans)
- Providing SMEs, medium-sized enterprises, non-profit corporations, and public institutions with long-term and low-interest loans for their energy-saving facility installation investment
- For energy-saving facilities such as waste heat recovery facilities and high-efficiency equipment
Improving Energy Efficiency for
Low-income Households
- Improving the energy use environment by providing insulation, windows, boiler replacement, and cooling equipment to low-income households and social welfare facilities
- Supporting insulation, window, boiler replacement, and cooling equipment Supporting the
transition to the RE industry
related to shipbuilding
equipment
- Supporting cooperative factories and facilities that can manufacture equipment for offshore wind structures and power plants to revitalize the economy of Gunsan City (Jeonbuk), the Green New Deal policy, and the renewable energy industry in the city
- Establishing offshore wind power structures to revitalize RE business and cooperative factories/equipment to manufacture solar substructures Regional energy-
saving projects (research on regional energy
industry transition)
- Preparing just transition policies to systematically respond to the impact on industries, employment, and regions due to energy transition, including the reduction of coal-fired power and LNG power generation
Note: SMEs = small and medium-sized enterprises Source: Korean New Deal (2021)