According to International Energy Agency (IEA) website publication on Renewables 2022 Analysis and forecast to 2027 report:
While permitting complications slow PV expansion, new policies ensuring revenue stability for wind improve the forecast
Korea’s renewable capacity is expected to double in the main case, expanding by 28 GW over 2022-2027, with solar PV accounting for almost 85% of all expansion. However, this forecast has been revised down slightly (-8%) from last year’s because permitting challenges have led to 80% lower bidding capacity for fixedprice PV contracts over the last two years. In addition, the scheme was undersubscribed for the first time since its introduction in 2017 because the government lowered the auction ceiling price even though costs had risen.
Korea’s cumulative wind capacity is expected to more than triple by 2027. Although PV expectations are lower, the forecast for wind developments is more optimistic than last year. While higher renewable energy certificate (REC) prices and strong wholesale prices remain key drivers of growth, the new policy introducing 20-year fixed-price contracts (from the second half of 2022) for onshore and offshore wind projects will especially improve their revenue certainty compared with the REC scheme, leading to more optimistic outlook.
In the accelerated case, Korea’s renewable market growth could be 23% higher than in our main case. This would result mainly from greater auction volumes if the government adjusts the ceiling price upwards to account for higher costs. Plus, corporate PPA market expansion under the Korean government’s K-RE100 initiative could accelerate the development of renewable energy projects of more than 300 kW of capacity. Permitting, social acceptance and land availability obstacles, which remain key impediments to both solar PV and wind expansion, need to be addressed to enable faster commissioning.
