Korea’s Korea’s Policy Direction forPolicy Direction forR&D and Dissemination ofR&D and Dissemination of New & Renewable EnergyNew & Renewable Energy

Korea Energy Management CorporationOCTOBER, 2003

CONTENTSCONTENTS

Energy Statistics in Korea

History of NRE policies

Definition of NRE

Investments for NRE R&D and Dissemination

Status of NRE in Korea

Strategy for NRE R&D and Dissemination

• Strategy for PV, Fuel Cell, Wind Power

Energy Statistics in KoreaEnergy Statistics in Korea

’97 ’98 ’99 ’00 ’01 ’02

GDP Growth (%) 5.0 -6.7 10.9 9.3 3.1 6.3

Primary Energy ConsumptionGrowth (%)

9.3 -8.1 9.3 6.4 2.9 5.4

Energy/GDPElasticity 1.86 1.22 0.85 0.68 0.92 0.85

Overseas Dependency (%)

97.6 97.1 97.2 97.2 97.3 97.3

▣ GDP Growth and energy consumption

▣ Primary Energy consumption

Petroleum CoalAtomic En

ergyLNG Others

Share

(%)49.1 23.4 14.2 11.2 2.1

(year 2002)

* Others include hydro power and NRE

▣ Promulgation of the Promotion Act for NRE Development (1987)

▣ 10-year National Plan for Energy Technology Development (1997)

▣ Basic Plan for NRE Technology Development and Dissemination (2001)

▣ Amendment of the Promotion Act for NRE Development, Utilization & Dissemination (1997, 2002)

▣ 10-year National Basic Plan for NRE Technology Development and Dissemination (2003, not announced yet )

History of NRE policiesHistory of NRE policies

Definition of NREDefinition of NRE

▣ The Definition of NRE is classified into the following two types

- Renewable energy : Solar thermal, Photovoltaics, Biomass,

Wind, Small-hydro power, Geothermal, Ocean, Waste

- New energy : Fuel cell, coal conversion (liquefaction and

gasification), Hydrogen Energy

Investments for NRE R&D and DisseminationInvestments for NRE R&D and Dissemination

▣ Budget put into the NRE technology R&D from 1988 to 2002 amounts to 248.2 billion Won (includes 97.5 billion Won of private matching fund)

▣ In addition, 76.8 billion Won of subsidies and 305.8 billion Won of

low interest loan have been invested for NRE dissemination.

< Investment for NRE technology R&D from 1988 to 2002 (Unit : billion Won) >

Solar

Thermal

Photo-

volataicsFuelCell

Biomass

Energy

Waste

Energy

Coal

Gasfica-tion

Wind

PowerOthers

15.1 37.5 70.7 27.5 24.0 28.2 23.0 22.2

* 1$ = 1,200 won

Status of NRE in KoreaStatus of NRE in Korea

’98 ’99 ’00 ’01 ’02Annual

Growth Rate(%)

PrimaryEnergyConsumption

165,932 181,363 192,887 198,410 209,112 5.9

NRE Consumption 1,716 1,901 2,131 2,457 2,922 14.2

Share (%) 1.03 1.05 1.11 1.24 1.40 -

(Unit : 1,000 TOE)

▣ Consumption of NRE by Year

* NRE Consumption Prospected for 1.7%(2006), 2.2%(2011)

▣ NRE consumption according to resources in 2002

Resources Dissemination Example Share(%)

Solar Thermal Approx. 190,000 Solar Hot Water System 1.2

PV 5,418 ㎾ p for Electrification and Street light, etc 0.2

Wind 13,259 ㎾ in 86 units, in Jeju Island etc 0.1

Biomass 108 unit of Industrial and Municipal biogas system 4.1

Waste 438 unit of Industrial and Municipal solid waste incinerators 93.4

Small Hydro42 MW in 30 Units, such as Reservoir and Waste Water Disposal Plant 1.0

▣ Targets for NRE supply : 2%(‘03), 3%(‘06) and 5%(‘12)

Connecting R&D Program with Dissemination Program

Connecting R&D Program with Dissemination Program

R&D R&D InfrastructureInfrastructure DisseminationDissemination•Priority Selection and Concentration•3 High-Priority Areas : Photovoltaics, Wind Power, Fuel Cell

•Performance Evaluation & Demonstration Program•Certification of NRE Product

•Obligatory installation for Public Sector•Compensation for Cost Difference of NRE Power Generation •Subsidy and Loan Program

Strategy for NRE R&D and DisseminationStrategy for NRE R&D and Dissemination

▣ R&D Goal Cell Efficiency : 12%(’02) 15%(’06) 17%(’12)

System Price(million won/kW) : 15(’02) 12(’06) 8(’12)

Generation Cost(won/kWh) : 996(’02) 750(’06) 310(’12)

▣ Major R&D Project Develop 3 ㎾ Generation System for Residential Houses(’04)

Develop 10 ㎾ Generation System for Commercial Buildings(’06)

Develop Thin film Solar Cell (’12)

Strategy for PV*Strategy for PV*

* Not officially announced

Strategy for PVStrategy for PV

▣ Dissemination Goal PV System for Residential House(3kW) :

10,000 houses(’06) 100,000 houses(’12)

PV System for Commercial Buildings(10kW) : 5,000 buildings(’06) 40,000 buildings(’12)

PV System for Industrial Buildings(20kW) : 5,000 buildings(’06) 30,000 buildings(’12)

1.3 GW by 2012

Strategy for Fuel CellStrategy for Fuel Cell

▣ R&D Goal Develop 3kW PEMFC for Residential House(’04)

Develop 250kW MCFC System(’08)

Develop 10/50kW PEMFC for Commercial Buildings(’12)Manufacturing Cost : Under $1,500/kW

Operating lifetime : Over 40,000 hr

Develop Portable DMFC & PEMFC(’08)

Strategy for Fuel CellStrategy for Fuel Cell

▣ Dissemination Goal 250kW MCFC :

6 units (’08) for Demonstration

3kW PEMFC/SOFC for Residential Houses : 10,000 units(’12)

10kW PEMFC for Commercial Buildings : 2,000 units(’12)

370MW by 2012

Strategy for Wind PowerStrategy for Wind Power

▣ R&D Goal Wind Turbine System :

750kW ~ 1MW(’05) 1.5MW(’08) 3MW(’12)

Manufacturing Cost : 600~700$/kW(’12)

▣ Dissemination Goal 13MW(’02) 350MW(’07) 1,900MW(’12)

Thank you