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Securing Global Competitiveness Based on a High-level of Technology Close

Securing Global Competitiveness Based on a High-level of Technology

Korea‘s level of technology in the field of new and renewable energy stands at 86% (with the highest level being 100%), according to the Korea Institute of Science and Technology Planning and Evaluation (KISTEP, 2018). There is a technological gap of around 10% compared to other developed countries, such as the US, Japan, and European nations.

The growth of the photovoltaic industry is led by cell and module manufacturers (Hanwha Solution, Shinsung ENG, Hyundai Energy Solution, and OCI). Those companies are expanding the domestic market and at the same time, increasing exports and the number of overseas plants.

The wind power industry has infrastructure for producing major parts with high growth potential (blades, power converters). The industry intends to expand the domestic market and investment and secure global competitiveness by creating large-scale wind farms.

Domestic manufacturers have already acquired manufacturing capabilities in the hydrogen field, such as for hydrogen vehicles and fuel cells, and are now promoting global projects to manufacture and expand the infrastructure for green hydrogen production (transport, storage, charging and sales).

"Domestic Technology Competitiveness of Renewable Energy Sources"

Domestic Technology Competitiveness of Renewable Energy Sources Energy Source, Annual Investment by the Government (USD million), Securing Technological Competitiveness(Technological Gap with the Country with the Highest Level, Increase or Decrease of Technological Gap, Technology Level Compared to Leading Countries)
Energy Source	Annual Investment by the Government (USD million)¹⁾	Securing Technological Competitiveness
Energy Source	Annual Investment by the Government (USD million)¹⁾	Technological Gap with the Country with the Highest Level²⁾	Increase or Decrease of Technological Gap ²⁾	Technology Level Compared to Leading Countries ³⁾
Photovoltaic	52.4	Under 3 years	Decreased under 1 year compared to 2014	Over 80%
Wind power	35.9	Over 5 years	Increase compared to 2014	Over 60%
Hydrogen	6.1	3-5 years	Decreased over 1 year compared to 2014	Over 70%
Fuel cell	25.9	Under 3 years	Decreased under 1 year compared to 2014	Over 80%
Solar	4.2	Under 3 years	Decreased under 1 year compared to 2014	Over 80%
Thermal	5.7	Over 5 years	Decreased over 1 year compared to 2014	Over 70%
Marine	6.8	3-5 years	Decreased over 1 year compared to 2014	Over 60%

※ Source: Key Renewable Energy Technology Development Evaluation Report (KISTEP, July 2018)

2013-2017, annual average government investment amount, project budget request (2014-2018), and won-dollar conversion by applying the average exchange rate for 2018
2016 Technology Level Evaluation (KISTEP, 2017)
Research on New and Renewable Energy Technology Level and Overseas Technology Adoption (KISTEP)

Increased Capacity and Power Generation Ratio of Renewable Energy Open

Increased Capacity and Power Generation Ratio of Renewable Energy

After the revision of the New and Renewable Energy Development, Use, and Dissemination Promotion Act in October 2019, statistics now exclude non-recycled wastes, according to the Korea Energy Agency. The proportion of new and renewable energy based power generation in 2020 was 7.43%, an increase of 25.9% compared to the previous year, due to the increase in photovoltaic and wind power based power generation (2019 34,196GWh → 2020 43,062GWh). The cumulative installed capacity of new and renewable energy in 2020 was 25.9 GW, up 3.2%p compared to the previous year. Solar power accounts for 66.8% and wind power accounts for 6.3% (KEA, 2020).

"New/Renewable Energy Power Generation and Share in the Past
												Five Years "

New/Renewable Energy Power Generation and Share in the Past Five Years Category, Years
Category		'16	'17	'18	'19	'20
Total power generation(MWh)		562,219,124	78,012,662	594,585,781	589,148,478	579,936,931
Share(%)		3.32	4.11	4.99	5.80	7.43
Total power generation(MWh)		18,664,233	23,767,948	29,656,919	34,195,813	43,061,511
Renewable energy based power generation		17,160,150	21,012,926	26,189,965	30,879,376	37,161,788
New energy based power generation		1,504,083	2,755,022	3,466,954	3,316,436	5,899,723
Renewable energy	Photovoltaic	5,515,817	7,737,852	10,154,964	14,163,040	19,297,854
	Wind power	1,683,142	2,169,014	2,464,879	2,679,158	3,149,798
	Hydro	2,858,714	2,819,882	3,374,375	2,791,076	3,879,383
	Marine	495,556	489,466	485,353	474,321	457,263
	Bio	6,237,564	7,466,664	9,363,229	10,415,632	9,938,354
	Waste	369,357	330,048	347,166	356,149	439,137
New and renewable energy	Fuel cell	1,143,402	1,469,289	1,764,948	2,285,164	3,522,350
New and renewable energy	IGCC	360,681	1,285,733	1,702,006	1,031,272	2,377,374

Current Status of the Renewable Energy Industry Open

Current Status of the Renewable Energy Industry

As the government’s renewable energy transition policy has expanded to focus on new and renewable energy, the 2020 Industry Statistics surveyed the status of the overall industry including the enactment of New and Renewable Energy Industry Special Enactment in 2020 as well as the manufacturing, construction, supply, and service industries. As of 2020, the total sales of the new and renewable energy industry was approximately KRW 25.5 trillion. The number of employees stood at 119,000, and investment grew to KRW 7.7 trillion.

The construction industry occupies a large proportion, due to the expansion of photovoltaic, followed by fuel cell and wind power based construction. The power generation and heat supply industries also account for 96% and 70% of the number of companies and employees, respectively, due to the increase in small-scale photovoltaic power generation companies.

The service industry, in addition to manufacturing, construction, and supply industries, recorded sales of KRW 1.3 trillion with 5,000 employees, because of expansion of the new and renewable energy supply as well as engineering and maintenance service companies.

Current State of Renewable Energy Production Category, Number of Companies, Number of Employees, Sales, Investment
Category	Number of Companies		Number of Employees		Sales		Investment
Category	the number	Proportion(%)	person	Proportion(%)	KRW 100 million	Proportion(%)	KRW 100 million	Proportion(%)
Manufacturing	499	0.6	12,759	10.8	107,369	42.2	3,180	3.9
Construction	2,169	2.6	17,617	14.9	71,886	28.2	995	1.2
Power generation and heat supply	78,276	95.6	82,810	69.9	62,696	24.6	72,460	94.6
Service	963	1.2	5,322	4.5	12,779	5.0	210	0.3
Gold	81,907	100.0	118,508	100.0	254,730	100.0	76,845	100.0

※ Source: 2020 New and Renewable Energy Industry Statistics (Korea Energy Agency, December 2021)

Global Photovoltaic and Wind Power Companies Continue to Enter Korea Open

Global Photovoltaic and Wind Power Companies Continue to Enter Korea

Companies in Japan, Germany, Spain, and China have been continuously promoting the establishment of corporations in Korea. Some major companies in Europe and North America are promoting the establishment of subsidiaries in charge of power generation or Korean corporations through cooperation with local governments or Korean companies, so that they can participate in plans for offshore wind power.

Foreign direct investment into Korea has continued to increase since 2013, according to the Ministry of Trade, Industry and Energy in 2021. It contributes to the high proportion of investment in manufacturing, which plays the role of producing intermediate parts, such as machinery and semiconductors. Analysis participation in the 4th industrial revolution-related global value chain has been a factor for increased FDI in Korea.

Vestas, a Danish wind turbine manufacturer, recently settled a win-win business agreement in relation to Ulsan floating offshore wind farm project. Investment from foreign private companies continue to increase, including CIP, a Danish investment company that partnered with SK E&S; GIG-Total of UK and France; Shell-CoensHexicon of the Netherlands and Sweden; Ocean Winds of Spain; and Equinor of Norway.

Influx of Japan and JA Solar of China invested capital in the Saemangeum Renewable Energy Cluster and started construction of their plants. Orsted, a state-owned energy company of Denmark, chose Korea to open their second corporation in the Asia-Pacific region, with an aim to enter the wind power business in Korea.

"Global Companies Located in Korea"
Renewable Energy Promotion Plans Open
Renewable Energy Promotion Plans

Following the announcement of the carbon neutrality target by 2050, the Korean government plans to revise the sub-roadmap and implementation plans to create a low-carbon economy and industrial ecosystem and make a transition to a carbon-neutral society.

The 2050 Carbon Neutrality Committee (October 2010) recently resolved and made a proposal to the government regarding 2030 National Greenhouse Gas Reduction Goal (Nationally Determined Contribution (NDC), a reduction in greenhouse gases by 40% of 2018 amounts by 2030), and a 2050 Carbon Neutrality Scenario (suspend coal power generation to minimize carbon emissions required for electricity and heat production).

Current policies aiming to promote new and renewable energy include
▲ The Renewable Energy 3020 Implementation Plan (December 2017),
▲ The Renewable Energy Industry Competitiveness Reinforcement Plan (April 2019),
▲ The 3rd Basic Energy Plan (June 2019)
▲ The Korean Version of the New Deal Comprehensive Plan (July 2020)
▲ The 2050 Carbon Neutrality National Assembly Speech (October 2020)
▲ The 5th New and Renewable Energy Basic Plan (9th Basic Plan for Electricity Supply and Demand) (December 2020)
▲ The 2050 Carbon Neutrality Committee NDC Upgrade and 2050 Scenario (October 2021)
01. Renewable Energy 3020 Implementation Plan (December 2017)

20% of renewable energy power generation by 2030

Supply over 95% with clean energy (PV 30.8GW, wind 16.5GW)

Short-term (12.4 GW) and Mid to long-term (36.3 GW)
02. Short-term (12.4 GW) and Mid to long-term (36.3 GW)

Exports of USD 10 billion and 40,000 employees by 2030

Lay the foundation for a new growth engine

(Market) Carbon certification, REC, lowest efficiency

(System) Repowering, RE100, regional innovation
03. 3rd Basic Energy Plan (June 2019)

Sustainable growth and improvement of quality of life (30-35% of renewable E power generation by 2040)

Energy consumption structure innovation, clean and safe energy mix conversion, distributed/participatory energy Expand system, expand competitiveness and secure foundation
04. Korean Version of the New Deal Comprehensive Plan (July 2020

(Digital New Deal) Strengthen the D.N.A ecosystem, develop virtual industry, improve educational infrastructure

(Green New Deal) Infrastructure green transition, low carbon distributed energy diffusion, green industry innovation (42.7GW of renewable E generation capacity by 2025, create 38,000 jobs)
05. 2050 Carbon Neutrality National Assembly Speech (October 2020)

2050 carbon neutrality goal

(1) Low carbon economic structure

(2) Low carbon industrial ecosystem

(3) Fair transition to a carbon-neutrality society
06. 5th New and Renewable Energy Basic Plan (9th Basic Plan for Electricity Supply and Demand) (December 2020)

25.8% of renewable power generation by 2034 (Regeneration E 22.2% New E 3.6%)

Target installed capacity: 84.4 GW (Regeneration 80.8, New 3.6)
New/renewable energy industry support system
The Renewable Energy Certificate (REC) weight was reorganized to strengthen support for investment in photovoltaic, wind power, and hydrogen fuel cells. The targeted mandatory supply ratio of new and renewable energy by 2026 has been recently raised to 25% to expand the demand for new and renewable energy. Investment in energy-saving facilities (including renewable e) will receive a tax credit (tax credit ratio: 7% for SMEs, 3% for medium sized enterprises, and 1% for others). The Ministry of Trade, Industry and Energy operates various systems, such as FDI funds for new industries and an online investment matching system (KRW 50 billion fund and a matching platform between domestic and foreign companies seeking investment Opportunities).
Establishment of Industrial Ecosystem Differentiated by Region Open
Establishment of Industrial Ecosystem Differentiated by Region

Regions with a renewable energy industry base or where large-scale projects are planned will strengthen infrastructure and create differentiated industrial ecosystems by region. Local governments will play a leading role in discovering and promoting customized, large-scale projects for their regions, and the central government will support the establishment of infrastructure, R&D demonstration, and human resource development.
- Chungbuk (Photovoltaic)
  
  (Status) Many PV manufacturers, 67% of domestic cells and modules produced
  
  Promote PV projects with a scale of approximately 1GW
  
  (Direction) PV products and convergence, develop and verify new products and services
  
  (Related companies) Hanwha Q CELLS, Hyundai Energy Solutions, Hanwha Chemical, Doosan Fuel Cell
- Donghae (East Sea) area (Offshore Wind Power)
  
  (Status) 750 companies (shipbuilding, offshore, heavy industry), good wind direction (8-8.5m/s)
  
  Promote the creation of a 1GW floating offshore wind farm near the Donghae Gas Field
  
  (Direction) Floating offshore wind power R&D-verification-commercialization (development and early industrialization)
  
  (Related companies) Dongguk S&C, Seohan E&P, LG Electronics, Top Solar
- Jeonbuk (Photovoltaic, Offshore Wind Power)
  
  (Status) Saemangeum Renewable Energy Cluster
  
  Promote solar power (3GW) and offshore wind power (1GW) through resident participation
  
  (Direction) Consolidate manufacturing/construction companies/research institutes, conversion of shipbuilding equipment and materials companies
  
  (Related companies) OCI, S-Energy, N Electric, Human Composite, etc.
- Gyeongnam (Offshore Wind Power)
  
  (Status) 84 wind turbine and parts companies (Doosan Heavy Industries and Construction, Unison)
  
  Promote wind power project with a total scale of 1.9GW, including Yokjido offshore wind power
  
  (Direction) Specialized as a base for development, demonstration, and production of ultra-large wind power systems and parts
  
  (Related companies) Unison, Doosan Heavy Industries and Construction, Hyosung Heavy Industries, CS Bearing, Taewoong, Hyunjin Materials
- Jeonnam (Photovoltaic, Offshore Wind Power)
  
  (Status) 22% of PV facilities (1.3GW, largest in Korea)
  
  PV (2GW, Yeongam Lake), Promote offshore wind power (0.8GW, Wando)
  
  (Direction) Convergence business and win-win model demonstration base
  
  (Related companies) Shinsung ENG, Top Infra, Dasstech, GPhiilos
※ Source: Renewable Energy Industry Competitiveness Reinforcement Plan (2019)
※ Data also provided by: Korea Energy Corporation

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KIM MIN JUNG Key Industries Promotion Team

T.+82-2-3460-3239

Recommendation on Locations

BEST1

[Gwangju Metropolitan City Gwangsan-gu, Jeollanam-do Hampyeong County]

Bit-Green Industrial Complex

Designated area(m2) : 4,070,692
Management : Korea Industrial Complex Corporation
Nearby Railway : Hampyeong Station (30km)
Nearby Airport : Gwangju Airport (20km)

BEST2

[Jeollabuk-do Gunsan City]

Saemangeum District National Industrial Complex

Designated area(m2) : 18,495,346
Management : Saemangeum Development Agency
Nearby Railway : Gunsan Station (28km)
Nearby Airport : Gunsan Airport (15km)

BEST3

[Ulsan Metropolitan City Nam-gu]

Ulsan Techno General Industrial Complex(Ulsan Free Economic Zone)

Designated area(m2) : 1,286,977
Management : Ulsan Metropolitan City
Nearby Railway : Taehwagang Station (9km)
Nearby Airport : Ulsan Airport (15km)

BEST4

[Gyeongsangnam-do Miryang City]

Chunhwa Agricultural Industrial Complex

Designated area(m2) : 211,785
Management : Gyeongsangnam-do Miryang City
Nearby Railway : Sangdong Station (14km)
Nearby Airport : Gimhae International Airport (56km)

BEST5

[Incheon Metropolitan City Namdong-gu]

Namdong National Industrial Complex (Renewable Business District)

Designated area(m2) : 9,504,046
Management : Korea Industrial Complex Corporation
Nearby Railway : Bupyeong Station (9km)
Nearby Airport : Incheon Airport (32km)

BEST6

[Daejeon Metropolitan City Dong-gu]

Haso Eco-friendly General Industrial Complex

Designated area(m2) : 306,703
Management : Daejeon Metropolitan City
Nearby Railway : Daejeon Station (17km)
Nearby Airport : Cheongju International Airport (71km)

KOTRA site

Invest Korea

Renewable Energy

01. Renewable Energy 3020 Implementation Plan (December 2017)

02. Short-term (12.4 GW) and Mid to long-term (36.3 GW)

03. 3rd Basic Energy Plan (June 2019)

04. Korean Version of the New Deal Comprehensive Plan (July 2020

05. 2050 Carbon Neutrality National Assembly Speech (October 2020)

06. 5th New and Renewable Energy Basic Plan (9th Basic Plan for Electricity Supply and Demand) (December 2020)

New/renewable energy industry support system