Mandatory Supply Ratio of Solar and Wind Power Electricity to Expand from 9% to 25%

Amendment to the Enforcement Decree of the Renewable Energy Act Approved at Cabinet Meeting... Legal Cap Raised to 25% by 2026

[Sejong=Asia Economy Reporter Kwon Haeyoung] The Renewable Portfolio Standard (RPS) ratio, which mandates power generation companies to supply electricity generated from expensive renewable energy sources such as solar and wind power, will be expanded from the current 9% of total power generation to the legal cap of 25% by 2026.

The Ministry of Trade, Industry and Energy announced on the 28th that the amendment to the Enforcement Decree of the "Act on the Development, Use, and Diffusion of New and Renewable Energy" containing this content was approved at the Cabinet meeting.

The amended enforcement decree includes raising the RPS ratio applied to power plants from 12.5% next year to 14.5% in 2023, 17% in 2024, 20.5% in 2025, and the legal cap of 25% from 2026 onward.

This follows the amendment to the Renewable Energy Act in April, which expanded the upper limit of the mandatory supply ratio under the RPS from the previous 10% to 25%. Public and private power generation companies with power generation facilities of 500 MW or more, including six power subsidiaries under Korea Electric Power Corporation (KEPCO), are obligated to supply a certain amount of electricity generated from renewable energy. The government sets the supply amount of renewable energy through the mandatory supply ratio under the RPS, and this enforcement decree amendment raises the annual mandatory ratio. Power generation companies mainly fulfill their RPS obligations by purchasing "Renewable Energy Certificates (REC)" from solar power operators and others.

An official from the Ministry of Trade, Industry and Energy stated, "We have established an institutional foundation to steadily implement the renewable energy generation ratio in accordance with the '2050 Carbon Neutrality Scenario' and the upward revision of the '2030 National Greenhouse Gas Reduction Target (NDC).'" He added, "To promote efficient diffusion of renewable energy, we will pursue cost reduction and competitiveness enhancement of renewable energy through technological innovation such as high-efficiency solar power and large-scale wind power."