South Korean Government Implements Many Strategies to Achieve Energy Efficiency and Energy Reduction

Feb 25, 2020

South Korean Government has set a goal that will reduce current energy consumption level by 14.4% compared to that of 2017 by 2030 by implementing an energy consumption structure that resembles one from an advanced country. It has established this goal in order to clear its name as the “country that consumes the most energy” out of OECD (the Organisation for Economic Co-operation and Development) countries. As a result, it plans to carry out pilot projects for energy efficiency MBO (Management By Objectives) system and a system that requires a zero-energy building starting from this year and achieve its goal of safe and clean “energy conversion” as soon as possible.
◊South Korean Government to implement many measures to achieve energy reduction
According to Ministry of Trade, Industry and Energy and Korea Energy Management Corporation, they are going to finish setting up plans for “energy efficiency MBO system” and carry out pilot projects starting from next month. The purpose of the system is to reduce greenhouse gases by implementing an energy efficiency management system into industrial businesses that consume large amounts of energy and reduce current energy consumption level by 38% compared to that of 2017 by 2040.
Korea Energy Management Corporation is going to work with such businesses and provide incentives depending on how much they improve in energy efficiency. Businesses that use more than 2,000 TOE (Ton of oil equivalent) annually will be subjected to receiving incentives and they have to improve by at least 1% of annual energy intensity compared to three years prior. Energy intensity indicates amount of energy needed to produce constant amount of added values. Because higher energy intensity indicates more energy is needed to produce added values, such consumption is seen as “ineffective”.
Korea Energy Management Corporation is going to refund electric rates annually depending on the size of a business after going through verification and deliberation. Starting from this year until 2029, it plans to refund $747 million (910 billion KRW) to 2,856 businesses. Major corporations will receive refunds equivalent to 10% of their electric rates while medium-sized companies and small companies will receive 20% and 50% respectively. Korea Energy Management Corporation estimates that 9.084 million toe of energy and 23.345 million tons of CO2 gas can be reduced between 2020 and 2029. It also analyzed that energy reduction can lead to a saving of $9.84 billion (12 trillion KRW) and that there will be economic effects that are 13 times greater compared to the amount of refunds. It also expects that 24,000 jobs can be created through energy reduction.
In addition, Korea Energy Management Corporation is going to make it a requirement for public buildings that are bigger than 1,000m2 in total floor area to have a “zero-energy building” starting from this year. This requirement will be a step-by-step roadmap to having every building in South Korea to become a zero-energy building by 2030. Zero-energy building is a green building that minimizes energy load and reduces energy consumption by using new renewable energy. Korea Energy Management Corporation is going maintain its benefit that provides incentives such as lenient building standard, tax benefit, financial support, and subsidy for installation of new renewable energy system if a business satisfies conditions for zero-energy building. Between January of 2017 and December of 2019, it received total of 84 applications.
Korea Energy Management Corporation is going to finalize on specifics of its “refund program for home appliances with the best efficiency” sometime during the first half of this year. This program partially refunds the cost of home appliances with the best efficiency to anyone. Refund schedule, budget, target item, and refund ratio are set up differently every year. In 2019, when it provided a similar program that refunds 10% of a cost up to $164 (200,000 KRW), it received 23,368 applications. Out of these applications, it provided refunds for 21,866 applications equivalent to $21.3 million (25.93771 billion KRW). One person received a refund of $101 (123,000 KRW) on average.
This program has helped lessen financial burden to purchase an expensive home appliance and induce more people to use home appliances with high efficiency. When Korea Energy Management Corporation conducted a survey on those who received refunds, 54.4% of them responded that they purchased home appliances with the highest grades knowing that they would receive refunds. Through this program, it expects to save 12GWh of electricity annually and reduce about 5,513 tons of greenhouse gases.

South Korean Government Implements Many Strategies to Achieve Energy Efficiency and Energy Reduction

◊South Korea listed at the bottom out of OECD countries when it comes to energy efficiency
South Korea’s energy intensity is ranked 33rd out of 36 OECD countries. South Korea is a country that is known to consume large amount of energy as it is ranked 8th based on amount of energy consumption. Its energy intensity almost doubled that of Germany in 2017 and it was also higher than that of the U.S. and Japan.
South Korea’s level of dependence on foreign countries for energy is almost 94%. The amount of imported energy in 2017 was $11 billion and it accounted for 23% of the total amount of imports. Energy efficiency will be weak as one’s dependence on foreign countries is high. “Improvement in energy efficiency” will be a key task that cannot be delayed any longer and it will help South Korea clear its name as a country that consumes large amounts of energy and have successful energy conversion at the same time.
Many countries have presented bold goals for energy reduction through improvement in energy efficiency and started to execute their plans as they wait for a new climate system to be implemented in 2021. Germany decided to reduce its amount of energy consumption in 2050 by 50% compared to that in 2008 while the United Kingdom is planning to reduce its current energy consumption by 18% compared to that in 2007. South Korean Government decided to reduce its energy consumption in 2030 by 14.4% compared to that in 2017 as part of its “energy efficiency innovative strategy” that was announced last year. Its slogan states that “energy efficiency is the most eco-friendly way and is the best economic energy source” and it is based on the government’s thinking that there will be greater expectancy effects with improving energy efficiency rather than converting power generation.
Staff Reporter Choi, Jaepil | jpchoi@etnews.com

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