Its now a story familiar to many in PV. A government promotes solar with a FIT and the industry grows quickly adding capacity. Seeing the cost of the FIT also grow, the government caps the FIT, then abolishes it and the industry stalls. This is largely how the PV installation growth pattern in Korea has looked in recent times. There are however serious signs that the industry may be getting the public support it needs to take off, but its not been easy getting there.
In 2008, South Korea saw installed capacity grow by six times on the previous year and assumed the number four spot for installed capacity in that year, behind Spain, Germany and the U.S. A capacity of 228 MW was added in the year.
Seeing this growth, Korean manufacturers in the semiconductor and LCD industries also began to act by moving into the PV space. Samsung and LG were two of the prominent movers, and Hyundai Heavy Industries and Hanwha have joined them more recently. However this move also coincided with the global financial crisis and vast oversupply in the PV industry, and some entrants withdrew from PV, in the words of Seoul-based Expo Solars Juya Lee, with tears in their eyes. The FIT was abolished on December 31, 2011.
There was hope amongst the Korean PV industry late last year that if Democratic United party candidate Moon Jae-in was successful in the December elections, that more support would be forthcoming (see pv magazine 05/12). However, this was not the case, with Park Geun-hye from the incumbent Saenuri party winning with 51.6% of the vote. But there has been a promising replacement for the FIT.A Renewable Portfolio Standard (RPS) has come into effect in Korea, which will require utilities to add renewable capacity to their generation mix. This component will step up from 2.5% this year to 10% in 2022. Of this, PV has been allocated a certain amount of that capacity each year: from 450 MW this year to 1.2 GW in 2016 (see PV component of RPS, p. 18). Under the RPS, Koreas EXPO Solar predicts 279 MW of capacity will be added nationally in 2013, bringing the cumulative capacity to 1 GW.
In an attempt to promote a range of PV applications and other renewable energies such as tidal and offshore wind, a multiplier is applied under the RPS. Ground-mounted PV in rice fields, dry fields, orchards, pasture or in forest areas receives the lowest multiplier of 0.7, which increases to 1.0 for ground-mounted arrays on other land types in excess of 30 kW. Ground-mounted plants smaller than 30 kW receive a 1.2 multiplier. New buildings receive the 1.0 or 1.2 multiplier depending on plant size. Rooftop or BIPV plants are the most highly incentivized with a 1.5 multiplier (see Koreas PV multiplier, p. 18).
The RPS is not the only public policy program in Korea promoting solar. In mid 2012 the Seoul Metropolitan Government launched its One Less Nuclear Power Plant (OLNPP) initiative, which broadly aims to increase the citys energy self-sufficiency from 2.8% in 2011 to 20% in 2020 and save 790,000 metric tons of oil equivalent (TOE) or 9,142 GWh in electricity production and 1.21 million TOE in petroleum and gas. This is roughly equivalent to the generation capacity of Koreas largest nuclear power plant, the Yeonggwang Unit-5.
The multifaceted OLNPP program includes a raft of measures from urban transport, through energy efficiency and renewable energy, under 10 broader areas of action. The drivers behind the program are the Fukushima Daiichi nuclear plant disaster and meltdown, in neighboring Japan in March 2011, and rolling blackouts in September of that year across Seoul and other major cities. Both events served as an urgent wake up call to Seoul inhabitants and Koreans throughout the country and the blackouts were unprecedented and caused widespread disruptions to everyday life.
The financial scale of the OLNPP is significant (see Seouls One Less Power Plant budget, p. 18) and will drive significant investment into PV in the city. Of the capacity, 290 MW is to be added under the Citizens Sunlight Power Stations program, to be completed in 2014. Public buildings and schools are allocated 130 MW and a further 160 MW is for houses and commercial buildings. Community solar will also be adopted with 30 MW of capacity planned to be added through neighborhood communities or cooperatives in the same period.
The Seoul Municipal Government will publish a Seoul Solar Map this month, to provide information about the rooftop plants, which very much links in with the OLNPP goal of raising awareness about energy issues. As a part of this awareness-raising component, schools are set to play a major part in the plan.
The Sunlight City program is also a part of the OLNPP, whereby city officials hope to install PV at 1,000 schools. The program will see 100 MW of capacity added to school buildings for completion also in 2014. Education about solar energy and PV will be included as a part of the program, with each array acting as an on-site demonstration of PV.
With so much PV coming online in the city, the Seoul government is also interested in adding storage capacity also. The OLNPP plan includes hydrogen fuel cell power plants with a capacity of 230 MW, to be added by 2014. Energy security remains one of the key aims to this component of the program, with the maintenance of key infrastructure in the event of emergency attributing for 190 MW of this 230 MW storage capacity, if it is required.
In the Korea Times, Mayor of Seoul Park Won-soon wrote that the OLNPP program, which includes 10 major projects to meet the goal, is an investment in the future in the wake of the Fukushima disaster. Wouldnt it be most unfortunate if we, who live nearest the neighboring country of Japan, fail to learn a lesson from the nuclear explosion in Fukushima? One Less Nuclear Power Plant will be the best gift from our generation to future generations, wrote Park Won-soon.
Of course local manufacturers and Korean firms invested in PV would be pleased to see the level of activity on a public policy level. In fact Expo Solars Juya Lee contends that some of the national support programs are being strengthened due to difficult PV market conditions.
Korean electronics giant LG has confirmed that it currently has no plans to increase manufacturing capacity but rather is focusing on cost reductions and efficiency gains.
Won Mo, from LGs Solar Marketing Division, said that n-type wafers are being employed to deliver conversion efficiencies in excess of 21%, and that LG modules employing this technology will be deployed in Germany and the U.S. soon.
Japans booming solar market is also shaping up as a key market for Korean manufacturers and brands. LG plans to ship 40% of its modules to Japan in 2013 and Won Mo emphasizes that Japanese consumers emphasis on, quality, liability and brand image, means that Korean manufacturers are well positioned to serve this market. LG says that it will produce 430 MW of PV in 2013, from its operations in Gumi.
EuPD Research has reported that some Korean PV manufacturers retain a very strong brand image.
Initial results from its End Customers in Focus study has shown that consumers are aware of the plight of the solar industry, and more likely to purchase brands such as Samsung because it is likely to be around to service its warranties long into the future.
Korean manufacturers are becoming more active in the Southeast Asian region also, with LG reported to be behind plans to develop a 22 MW power plant near Manila. The company will provide the bulk of the US$180 million finance for the project.
NPD Solarbuzzs Finlay Colville notes (see pp. 47-48) that this may become a trend with Korean manufacturers and industrial conglomerates, known as Chaebol, active in PV. He notes that industrial giants like LG, Samsung or even Hanwha have the financial capacity to develop a significant downstream business. This would presumably drive PV installation growth on the increasingly energy-conscious Korean peninsula and in the wider APAC region.
|South Koreas installed capacity p.a.
|Source: Expo Solar 2013
|PV component of RPS set aside
|Source: Korean Ministry of Knowledge and Economy
|Source: Korean Ministry of Knowledge and Economy
|Koreas PV multiplier
|Not on building or existing facilities
|5 land types: rice field, dry field, orchard, pasture, forest land.
|> 30 kW
|< 30 kW
|On building or existing facilities
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