The proposed measures aim to facilitate more active and beneficial corporate RE procurement through regulatory adjustments, market restructuring, and supportive policies.

The report specifically addresses the details of Korea’s current renewable energy PPA system. Various issues that hinder the widespread adoption of corporate renewable energy uptake through PPAs in South Korea, which is a part of the corporate renewable energy scheme (K-RE100) introduced in January 2021, are also analyzed. Countries around the world are proactively using PPAs, allowing businesses to bypass the conventional power markets and directly purchase electricity from energy producers. As a result, businesses can cut costs, improve the stability of energy prices and support the development of renewable energy infrastructure. On the contrary, Korea’s PPA scheme faces unique challenges primarily stemming from regulatory, financial, and market structure issues. This report focuses on three key obstacles: high ancillary costs, overlapping network usage fees, and opaque pricing policies. These barriers intertwine and collectively create a complex and unattractive environment for businesses interested in adopting RE solutions.

In addition, the report recaps the structure of the domestic electricity market as a significant hindrance to the adoption of the renewable energy PPA scheme. As competitive and dynamic PPA markets are activated in North America and Europe, energy markets are liberalized. On the other hand, in Korea, market flexibility and innovation are limited by the monopolistic presence of the Korea Electric Power Corporation (KEPCO). Such a unilateral structure makes it difficult for renewable electricity providers to supply energy in a stable and cost-efficient manner, which in turn creates an unfavorable atmosphere across the RE market. This poses a significant issue to businesses considering transitioning to renewable electricity through PPAs. In light of this, the report suggests a market reform to align Korea’s renewable energy policies to successful foreign cases. The measures for the overhaul include regulatory adjustments to foster more competitive markets, structural reforms to reduce unnecessary costs, and incentives to make renewables more attractive and economically viable for companies.

Lastly, the report analyzes the effects of policy incentives that support the use of renewables through overseas examples. Countries with dynamic PPA markets provide incentives, including tax benefits, subsidies, and price guarantees, to incentivize the private sector’s participation. Such incentives not only make financial cases for renewable electricity more compelling but also ensure that businesses secure stable and predictable energy prices, a pivotal point of consideration for long-term planning and investment.