en.Wedoany.com Reported - The Korea Energy Agency (KEA) recently proposed a reform plan to replace the current Renewable Portfolio Standard (RPS) system with a government-led contract auction market, aiming to help South Korea achieve its target of 100 gigawatts of installed renewable energy capacity by 2030.
KEA noted that the existing RPS framework faces several challenges. Under this mechanism, large power producers are required to fulfill renewable energy obligations, but many companies prefer to purchase Renewable Energy Certificates (RECs) rather than directly invest in new projects. This has led to increased reliance on small-scale development projects, a slowdown in renewable energy expansion, and rising compliance costs.
To address these issues, KEA proposes adopting an auction model. Renewable energy developers will compete in government-organized auctions, and successful bidders will sign long-term power purchase agreements with the state-owned utility Korea Electric Power Corporation (KEPCO). Long-term agreements are expected to provide developers with stable revenue, facilitating financing and the advancement of large-scale projects.
The reform also adjusts the participation threshold for small-scale projects, raising it from 100 kilowatts to below 1 megawatt. Community-owned renewable energy projects will have exclusive procurement channels to encourage local participation. Projects exceeding 1 megawatt are encouraged to collaborate through virtual power plant systems to enhance efficiency and grid integration.
KEA plans to impose stricter requirements on public and private power generation companies, requiring them to fulfill obligations through direct ownership or financial investment in renewable energy projects, rather than relying solely on certificate purchases. After 2026, no new renewable energy certificates will be issued. Existing certificates will be renamed as generation information certificates, used only for tracking and verifying renewable energy generation, including verification for RE100 commitments.
KEA plans to complete legal revisions by 2026 and launch the new auction market in 2027. The agency believes the reform will reduce renewable energy costs, promote community participation, and support the development of the domestic solar and wind power manufacturing industries.
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