Feb Seong-Ho Lee Korea Energy Management Corporation New & Renewable Energy Center

High dependency on energy imports Importing about 97% of the energy used Energy consumption is the world 10 th and GHG emissions are 10th Korea is the World 4 th oil importer Energy Status Import from the Middle East of Total Oil Oil in Total Energy Overseas Energy Dependency ’05’02’00’90’80 Classification Energy Imports ( unit : % )

Category of NRE 11 types are included in the promotion Act for NRE

History of NRE Policies Promulgation of the Promotion Act for NRE Development Making the legal basis of NRE Technology Development 1987 Amendment of the Promotion Act for NRE Development, Utilization & Deployment Making the legal basis of NRE Dissemination 1997 Amendment of the Promotion Act for NRE Development, Utilization & Deployment Including Obligation to the Public Office, Certification, F-I-T etc Year National Basic Plan For NRE Technology Development and Deployment Target : 5% by Amendment of the Promotion Act for NRE Development, Utilization & Dissemination Including Standardization, RESCO etc 2004

Investment For NRE Budget Increased by 2.2 times from 2004 to Local Energy Development Total Unit : M US$ R & D Deployment Subsidy - General Subsidy - Solar Roof System - Renewable Energy Complex Loan Feed-in-Tariff The year of 2004 was a turning point of NRE investment in Korea, the accumulated amount of the investments(1988 ~ 2003) was merely 658 M$ - Local Energy Development

NRE composition 8 PV 4, Wind Solar Thermal 221 Bio Hydro Waste % Amount (1000toe) Resource Targeting 5% of Total Energy Consumption by NRE/Total Energy Consumption is 2.27% (2006, tentative) Geothermal 60.1 Hydro 17.8% Bio 4.1% Wind 1.2% Solar Thermal 0.6% PV 0.2% Geothermal 0.1% Waste 76.0 %

NRE Budget Allocation Type Budgets Fuel Cells PV Wind Solar Thermal Bio Waste IGCC Geothermal Small Hydro Marine Others Total R&D Budgets Hydrogen Hydrogen 6.6% Fuel Cells 24.5% PV 16.2% Wind 12.1% Solar Thermal 4.7% Bio 8.4% Waste 7.0% IGCC 8.3% Geothermal 2.3% Small Hydro 0.8% Marine 0.7% Others 8.4% (1988~2006, unit : M US$) Percent of Portion

 Fuel Cell Vehicles(30 FCV, 4FCBUS) Monitoring Project  Residential Fuel Cell(210 Unit) Monitoring Project  Commercialization of the 1.5MW Wind Power system  Development of the 3MW Off-shore Wind Power Generation system Competitiveness in Manufacturing Si Raw Material, Ingot, Wafer, PV cell, Module  Commercialization of domestically developed systems Technology Status Technology Status by sources  Demonstration of the 300MW IGCC Plant by 2014  Participating in FutureGen Project(USA, India) PV Hydrogen & Fuel Cells  252MW-Capacity in SiHwa reclamation area by Korea WaterCo.  BD 20 and BD5 IGCCMarineBioWind

Subsidies which are currently provided to electricity generated from NRE. Compensation for the difference between NRE power generation cost and fossil fuel power generation cost to promote. Feed-in Tariff for NRE electricity generation Deployment Programs Feed-in Tariff Tide power Waste Landfill gas Hydro Wind Photovol- taic Resource Fixed Prices of Individual Resource (won / KWh, 1000won = 1$) 62.81~ SMP (20MW ↑) (20MW ↓) 72.80~ (30kw ↓) (30kw↑) Fixed Price SMP : ’06 average(79.8won/kwh)

The government subsidizes 60% of the installment costs of PV, Wind and Hydro and 50% of the Solar thermal and Geothermal installment expenses 100,000 photovoltaic roof programs by 2012 Subsidy Programs Deployment Programs Subsidy programs for deployment of NRE facilities The support measures are equal to that of the program for general subsidies 8,000 roof installed since 2004

When constructing a public building exceeding 3,000 square meters, 5% of total construction costs should be used in installing NRE facilities. Public Areas’ Promotion Deployment Programs Renewable Portfolio Agreement (RPA) Supporting various projects carried out by Local governments to improve the energy supply and demand condition Mandatory programs for NRE facilities Installation at public Institutions Local Deployment Program 9 Public Companies took the voluntary contract wih the MOCIE minister to invest $ 1.1billion into NRE sectors from 2006 to 2008

Loan Program The government provides long-term, low-interest loans for the customers or manufacturers of NRE systems which have been completely commercialized. Loans are provided for repayment 10 years with a 5 year-grace period. Deployment Programs Financing and Tax Benefits Tax Refund Program When a renewable energy system component is imported, 65% of its tariff is refunded by the government at the end of the year. In case of the investments into the renewable energy facilities, 10% of its income tax and corporate tax is refunded by the government at the end of the year.

Training programs Core Tech Training Center (H & FC, PV, Wind) Specialized graduate universities(H & FC, PV) Best-performance Lab(H & FC, PV, Wind, Solar Thermal, Bio, IGCC) Infrastructure Building Infrastructure Certification and Standardization In order to enhance public confidence on NRE, the Certification system is being operated. By standardizing the NRE systems, the market can expect more reliability on the NRE system

Korea and Italy exchanged the MOU on Science Technology Holding the joint workshops on PV, Wind and Hydrogen and Fuel Cells in the near future. - For further cooperation between two parties, experts need to visit each other countries and work together. Bilateral Cooperation up to date From 1993 to 2002, there had been five times joint workshops on the renewable energy between two parties. Suggestion for further cooperation Korea-Italy Cooperation Potential Cooperation