November 17, 2024 (BAKU) – This week in Baku, the anticipated 'COP29 Global Energy Storage and Grids Pledge' gained momentum, reflecting global efforts to ramp-up energy and storage six-fold to 1,500 gigawatts (GW) by 2030 to aid renewable energy deployment. Energy Day discussions on November 15 saw the pledge gain official backing by UK, Uruguay, Belgium and Sweden, yet the position of other countries remained unclear, including that of South Korea. The pledge was one of the 14 declarations and pledges announced by the Azerbaijan Presidency, building upon the COP28 pledge to tripling renewable and doubling efficiency by 2030.
Energy Storage System (ESS) stores and supplies power according to each individual application, which resolves the imbalance between power supply and demand and ensures grid stability. It improves energy efficiency by storing power during times of low demand of the day and releasing it during times of high demand. This compensates for the volatility of renewable energy, such as solar and wind power, to enable stable power supply.
Earlier this year, G7 countries agreed to increase global ESS capacity by more than 6 times by 2030, and there have been various country-level measures introduced to boost ESS capacity, like mandatory ESS installation by utilities, tax incentives or subsidies, and sufficient compensation in the power market, such as capacity payment.
Figure 1: Global cases of ESS market promotion measures
Source: Korea Energy Economics Institute (KEEI), designed by SFOC.
The COP29 commitment to increase global ESS capacity to 1,500 GW by 2030, a six-fold increase from 250 GW in 2022, reiterates the critical importance of ESS in accelerating renewable energy deployment. As a leader in the global batteries market, taking up 37% market share of the global battery market and the second only to China in terms of volume according to Invest Korea, it is concerning to see South Korea fail to officially voice its endorsement of the energy and storage pledge.
Figure 2: World’s major battery producers
Source: Invest Korea
Domestically, South Korea’s ongoing struggles to effectively boost ESS continue to hinder the development of the local renewables market. Major supply-side incentives offered for ESS, such as preferential REC weighting, charging fee discount, and installation cost support ended in 2020, leading to a market slump. The number of new installations of ESS reached its peak in 2018 and was reduced to 1/15 in 2022, with a cumulative deployment of only about 4.1GW. Despite the recent developments in Korea’s Jeju Island, with an ESS low-carbon centralized contract market (65MW) introduced in Jeju from 2023 and plans to extend this to a Korea-wide market in 2025, the scale is not sufficient to meet the triples renewable pledge target.
Similarly, while the Korean Ministry of Trade, Industry and Energy’s 10th Basic Plan for Electricity Supply and Demand (January 2023) forecast the need for 26GW long-cycle and large-capacity energy storage devices by 2036, and the ESS Development Strategy (October 2023) proposes the requirement to secure at least 0.6GW per year from 2025, there is no roadmap to implement these targets.
Gahee Han, Head of Energy Markets & Policy at Solutions for Our Climate (SFOC) said, "Last year, South Korea joined over 110 countries in signing the global pledge to triple renewables and double energy efficiency. To realize this commitment, global attention has focused on the need for a six-fold increase in energy and storage capacity. As a laggard in renewable energy deployment, ranking last among OECD countries, but a leader in batteries, it is deeply regrettable to see South Korea apparently left out amongst the leading endorsers of the COP29 energy storage pledge. Measures to address the volatility of solar and wind energy such as ESS, are essential to facilitate the energy transition and meet climate targets. South Korea must take an active stance in global ESS discussions and also act to implement a detailed ESS expansion roadmap and implementation plan domestically. Only then, renewables can be scaled up."
To achieve the 1.5°C target, the power sector needs to be carbon neutral by 2035 globally, with at least 50% of electricity coming from renewables. As solar and wind energy capacity expands, it is essential to expand resources like ESS that provide flexibility to the system. In addition to providing incentives to develop battery industry and maintain global competitiveness, it is critical for South Korea to voice its support of ESS in global forums such as COP and develop policies that promote ESS growth in the domestic energy market.
ENDS.
Solutions for Our Climate (SFOC) is an independent nonprofit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.
Media Contacts:
[In Baku Nov. 11-22] Yi Hyun Kim, International Communications Officer, SFOC, yihyun.kim@forourclimate.org, Signal/WhatsApp: +82 10 2985 0248
[In Seoul] Kate Kalinova, International Communications Officer, SFOC, kate.kalinova@forourclimate.org, Signal/WhatsApp: +82 10 2656 5581
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