Korea will invest US$36 billion (KRW40 trillion) over the next 5 years aiming to become the world’s top 5 countries in renewable energy, the government said on Wednesday, October 13, 2010. The US$36 billion fund will come from both the government and private sector. From 2011 to 2015, the government will spend KRW7 trillion in supporting the renewable energy industry, KRW3 trillion of which into research and development and KRW4 trillion into domestic market creation. The private sector, in the meantime, will inject KRW33 trillion, among which KRW20 trillion into solar, KRW10 trillion into wind, KRW900 billion into fuel cell, and KRW900 billion into biomass.
By 2015, Korea intends to foster the solar and wind industries to make them as large as its semiconductor and shipbuilding industries respectively capturing 15% of the global renewable energy market share, and turn them into one of the country’s key export industries generating more than US$36.2 billion in exports, creating some 110,000 jobs along the way.
The Ministry of Knowledge Economy reported ‘Strategies for Developing the Renewable Energy Industry’ designed to nurture the renewable energy industry into a new growth engine of Korea’s economy, at the 9th Committee on Green Growth chaired by President Lee Myung-bak held on October 13, 2010.
The Lee administration has been providing strong support to the renewable energy industry, which has resulted in remarkable growth in investment and the number of new businesses participating, thus creating new value chain and business ecosystem.
Over the past 3 years (2008-2010), the current government spent nearly KRW2 trillion in renewable energy, surpassing KRW1.4 trillion the previous government spent in the sector during the 5-year period it ruled. And the investment made by the private sector also rose from KRW1 trillion in 2007 to KRW3 trillion in 2009 to KRW4 trillion in 2010.
In 2011, the government budget for renewable energy will exceed the KRW1 trillion mark for the first time.
However, the Korean renewable energy industry is experiencing some difficulties due largely to low technological competitiveness without fundamental technologies, lack of domestic market and competitive local firms and weak business infrastructure to support business growth such as financing, tax benefits and skilled workforce.
To break the current deadlock in the market, the government and private sector will inject KRW40 trillion in the renewable energy industry over the next 5 years with the intention to become world’s top 5 renewable energy powers obtaining 15% share of the global solar and wind markets. Such investment, the government expects, will be able to elevate the country’s renewable energy exports to around US$36.2 billion and create 110,000 jobs.
In doing so, the government will work on 11 agenda across 4 key areas: strategic R&D and industrialization, market creation, export facilitation and business support.
The government will invest KRW1.5 trillion by 2015 in developing 10 fundamental technologies including next-generation solar cells and large-scale offshore wind power. The nation will also spend KRW1 trillion by 2015 in developing and localizing 8 major solar and wind technologies across components, materials and equipment. To test, inspect and demonstrate products and technologies developed by small- and medium-sized companies, Korea will establish up to 5 test beds by injecting KRW20 billion in 2011 and cultivate them into an industrial cluster.
To foster the domestic market for renewable energy, Korea will push forward with ’10 Big Green Projects’ which require schools, harbors, post offices, industrial complexes, manufacturing factories and logistics centers to install renewable energy systems. From 2012, the government will enforce the Renewable Energy Portfolio (RPS) to create a KRW49 trillion domestic market by 2022 and will launch community-owned pilot projects for renewable energy. Starting from 2013, Korea will adopt the Renewable Fuel Standards (RFS), a regulation designed to increase the supply of renewable fuels by setting a mandatory fuels standard.
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