The Korea Electric Power Corporation (KEPCO), South Korea’s largest electricity producer, is set to invest $1.8bn in developing a smart grid over the next five years. The investment will enhance the two-way communication of data within the distribution network, which among other benefits will improve the ability of the grid to accommodate distribution-connected generation, including renewable generators.
The development comes against the backdrop of the South Korean government’s growing support for renewable energy and reducing carbon emissions. In 2009, South Korea declared its aim of reducing its carbon emissions by 30% as compared to the predicted levels for 2020 (a reduction of about 4% as against actual emissions in 2005). South Korea was the first emerging market to set an emissions target and has plans to use smart grid investment as one of the core pillars of its transition to a low-carbon economy. In 2010, the government also announced an ambitious plan of investing about $36bn in the country’s renewable energy sector by 2015.
South Korea is aiming to increase the share of renewable energy in its energy mix to about 11% by 2030 from the current share of 2%. The country is making significant efforts towards attaining its renewable targets by promoting smart grids, and is eying an overall investment of about $25bn in their construction by 2030. Apart from reducing overall energy consumption, this investment is also likely to promote solar and wind power generation and help towards a significant reduction in carbon emissions from the power sector, which currently accounts for about 40% of the total carbon emissions in the country. Datamonitor believes the investment in smart grids is part of the country’s larger plan to reduce its reliance on fossil fuel imports while sustaining economic growth.
According to Datamonitor’s Power Generation Analyzer, renewable energy generation is forecast to increase to about 6.1TWh by 2015 from 1.8TWh in 2009 at an average annual growth rate of 22.6%. It will be interesting to see if the other major developing economies such as China and India, which have largely focused on securing fossil fuel resources, will follow South Korea’s lead. Regardless, in order to effectively integrate this level of renewable generation, South Korea will need to play a leading role in the development of smart grid technology. KEPCO’s investment commitment in this area and the fact that it has joined IBM’s Global Intelligent Utility Network Coalition have shown that it is willing and ready to do so.
*You might be interested in the following study: The Smart Power System: Smart Grids, smart meters, home controllers, home automation and energy efficiency