Oct New and Renewable Energy Status & Policies of Korea New and Renewable Energy Status & Policies of Korea

Energy Status in Korea Contents Ⅰ Ⅰ Achievements to Date Ⅱ Ⅱ Ⅲ Ⅲ National NRE Programs

Energy Status in Korea Ⅰ Ⅰ

8 th biggest energy consumer in the world (262.6Mtoe) Source:KEEI 5 th biggest importer, 68.7 billion USD (accounting for 56% of all energy import) Source:KEEI Energy Consumption Crude Oil Import CO2 Emission 7 th biggest Emitter in the world, 590Mtoe Source:European Commission’s Joint Research Center & PBL Netherlands Environmental Assessment Agency, 2012 Energy Status billion USD (Energy) 179 billion USD (Car(82) + Semi-conductor(49) + Shipbuilding(48))

NRE Status RE : 8 Sources -PV, Solar Thermal, Wind, Waste, Bio(LFG, Bio-Fuels), Hydro, Geothermal, Marine New Energy : 3 Sources - Fuel-cell, Hydrogen, Coal Liquefaction or Gasification RE : 8 Sources -PV, Solar Thermal, Wind, Waste, Bio(LFG, Bio-Fuels), Hydro, Geothermal, Marine New Energy : 3 Sources - Fuel-cell, Hydrogen, Coal Liquefaction or Gasification Waste, Hydro account for the most proportion 82.5% Waste, Hydro account for the most proportion 82.5% Hydro 11.6% Hydro 11.6% Bio 11% Wind 2.6% PV 2.4% Fuel Cell 0.6% Bio 11% Wind 2.6% PV 2.4% Fuel Cell 0.6% NRE Share in TPES (%) ’06’07’08’09 ’10 Waste 70.9% Waste 70.9% National NRE Supply Target : 11% by 2030 Annual Growth Rate : Annual Growth Rate : 7.0% (`06~`10) Prospect for each NRE Sources’ Growth Rate by 2030 PV(15%), Wind(18%), Bio(15%) PV(15%), Wind(18%), Bio(15%) Waste(4%), Hydro(2%) Increase Decrease

Ⅱ Achievements to Date

Strong government support Strong government support Active Participation by SMEs & Large Conglomerates Active Participation by SMEs & Large Conglomerates Establishment of industrial ecosystem Establishment of industrial ecosystem Building the value chain & business system based on collaboration between SMEs & large conglomerates Regarded as a main source of SMEs’ growth & Job Creation & the new profitable area of large conglomerates No. of manufacturers No. of manufacturers No. of employees No. of employees Sales (bil.USD) Sales (bil.USD) Exports (100mil. USD) Exports (100mil. USD) ’07 ’09 ’10 ’07 ’09 ’10 ’07 ’09 ’10 ’07 ’09 ’ ,661 10, times 3.7 times 6.5 times 7.3 times 13, Achievements

PV Existing industrial ecosystem Existing industrial ecosystem Foster the Second semiconductor industry based on the mutual development of large and small companies and job creation Foster the Second semiconductor industry based on the mutual development of large and small companies and job creation New era of GW scale power production by an integrated production system from Poly silicon to system New era of GW scale power production by an integrated production system from Poly silicon to system Increasing exports in all areas such as materials and modules including Equipment and turnkey orders Increasing exports in all areas such as materials and modules including Equipment and turnkey orders Poly silicon (tons) Poly silicon (tons) Ingot/Wafers (MW) Ingot/Wafers (MW) Cells (MW) Cells (MW) ’07 ’09 ’10 ’07 ’09 ’10 ’07 ’09 ’10 ’07 ’09 ’10 Modules (MW) Modules (MW) Exports Equipment Export Large-scaled Plant Export Jusung Engineering (130mil.USD to China), Toptech (14.5mil.USD to China) Jusung Engineering (130mil.USD to China), Toptech (14.5mil.USD to China) Samsung C&T Corp.(500MW Canada, 130MW US) SDN (45MW Bulgaria) Hyundai Heavy Industries Co. (175MW US) Samsung C&T Corp.(500MW Canada, 130MW US) SDN (45MW Bulgaria) Hyundai Heavy Industries Co. (175MW US) ’04 ’07 ’10 (unit: Million USD) ,100 31, ,000 1, , ,140 2, ,744 ’09 1,723

Wind Model sector for SME-LE to co-prosper Model sector for SME-LE to co-prosper Industrial structure building with collaboration between SMEs for components & large enterprises for finished goods Industrial structure building with collaboration between SMEs for components & large enterprises for finished goods Trends towards increasing exports of wind power system as well as tower & machined parts Trends towards increasing exports of wind power system as well as tower & machined parts A high potential of becoming the leading group combined with key industries A high potential of becoming the leading group combined with key industries Growing up as the 2nd shipbuilding industry Growing up as the 2nd shipbuilding industry ’04 ’07 ’10 (unit : million USD) Exports Category Major companies Parts Blade Tower Component System KM, Deck, Doha Industry, GwangdongFRP, HwashinFRP DongkukS&C, Unison, CS wind, Speco, Win&P Taewoong, Pyungsan, YonghyunBM, Hyunjin Materials, Unison, Mysco Doosan, Hyundai, Hyosung, STX,Samsung heavy industries, DSME Wind Power Export Hyundai Heavy Industries (Pakistan, 49.5MW, 1.65*30) STX(The Netherlands, 50MW, 2*25) Unison(Sri Lanka, 9.7MW, 750kW*13) Hyundai Heavy Industries (Pakistan, 49.5MW, 1.65*30) STX(The Netherlands, 50MW, 2*25) Unison(Sri Lanka, 9.7MW, 750kW*13)

National NRE Programs Ⅲ

Target : To Realize National Target, 11% of NRE Share in TPES, Launched in 2012 RPS (Renewable Portfolio Standards, 2012) FIT ( Feed in Tariff, 2002 ~ 2011) Projects for Large-scaled Market NRE Plants : 2,108 Power Generation : 10,129GWh, Supported Budget : 1,141bil KRW (951mil USD) 13 Mandatory Power Companies with Capacity of More Than 500MW Power Plants 0.5%p ↑1.0%p ↑ Obligatory NRE Production Ratio in their total Power Generation Year ~ Mandatory Ratio 2.0%2.5 %3.0 %3.5 %4.0 %5.0 %6.0 %7.0 %8.0 %9.0 %10.0 % (Unit : thou TOE) Responsible for 50% of Targeted NRE Supply Amount By 2020 Responsible for 50% of Targeted NRE Supply Amount By 2020 Inducing Market Investment of 48bil USD Reduction 16mil tons of CO 2 Annually (Reference) 2020 NRE Supply Target : 17,520 thou TOE

Obligated new buildings of public institutions with the floor area exceeding 3,000 ㎡ to use more than 5% of total construction expenses to install NRE systems Mandatory Use for Public Buildings (2004~2011) Mandatory Use and Design with NRE of more than 10% of total energy load for new, renovated and expanded public buildings over 1,000 ㎡ Revision of Obligation Program for Public Buildings (2012~) Projects for Large-scaled Market Public Institutions : State administrative bodies, Local autonomous entities and State-run companies

Subsidize part of the installation costs of NRE facilities to enhance NRE deployment and to relieve end-user’s cost burden (Factories, Individual Buildings, Schools) Expanded former ‘100,000 solar roof program’ to promote residential NRE deployment Support various NRE deployment projects by local governments for public buildings, social service facilities and remote area’s residents, etc. Corporation tax deduction : 10% of total investment in NRE Provide low-interest loan Subsidy & Loan Programs General Subsidy Program (1993~ ) 1 Million Green Homes Program (2009~ ) Local NRE Deployment Program (1996~ ) Loan & Tax Deduction Program (1983~ ) Aiming to disseminate 1 million green homes by 2020 Focusing on PV, fuel cell, wind and bio-energy

Solar-thermal water heating system PV power system BIPV Geothermal heating & Fuel-cell system &Wood Pellet Boiler Heat recovery & Ventilation System Automatic window system Enhanced external insulation Door Insulation LED lights 1 Million Green Homes Showcase 93% of heating Cost Reduction 50% of Cooling Cost Reduction New & Renewable Energy (Active) Energy Efficiency Improvements (Passive) Building 1 Million Green Homes by 2020 Remodeling of Existing NRE Attached Houses Goal : Achieving Green Life by Deploying 1 Million Houses with NRE Facilities Attached NRE Facilities : PV, Solar-Heating, Geothermal, Fuel Cell, Small Wind, Wood Pellet Promotion period : 2009 ~ Million Green Homes 1 Million Green Homes Program

To Secure ‘Track Record’ 2012 : Development of 5MW Offshore Wind Generators 2013 : Building a 100MW Demonstration Complex (5MW × 20) - South-west Coast Area 1 st Phase(~2014) : 100MW Demonstration Complex 2 nd Phase(~2016) : 900MW Pilot Complex 3 rd Phase(~2019) : 1.5GW Large Scaled Wind Farm ‘Offshore Wind Promotion Committee’ under Operation Roadmap to become World’s top-3 position in international wind market (Nov, 2010) “Technology Development – Demonstration – Expansion international Market Share” - 7.5bil USD Will be Invested in the Project in Partnership with Private Sector - Enhance the Installation Capacity up to 7.7GW with Local Governments after 2019 Scaling up the Capacity of Wind Complex by total 2.5GW (5MW × 500) by 2019 Offshore Wind Project Wind Energy Top-3 Roadmap

Vision 2015 Vision 2015 The target to be the world’s top 5 nation in NRE market International market share : PV 15%, Wind 15% Sale Export Employment Private Investment Private Investment ’09’12’15’09’12’15’09’12’15’09’12’15 (unit : bilUSD) (unit : 1,000 employees) (unt : 0.1bilUSD) Invest 33 bil.USD (private 28, government 5) by 2015

Thank you very much! Chang-goo Kim, Director of NRE Promotion Department New and Renewable Energy Center(NREC) of Korea Energy Management Corporation(KEMCO) Chang-goo Kim, Director of NRE Promotion Department New and Renewable Energy Center(NREC) of Korea Energy Management Corporation(KEMCO)