Yoon Government Focuses on Nuclear Power Development... Solar and Wind Companies Face Bankruptcy Risk

Renewable Energy Share to Surpass Nuclear by 2030
Renewable Energy Industry Nearly Wiped Out Due to China
Large Corporations Withdraw, SMEs Import and Sell Chinese Products

Overview of Woongjin Energy Daejeon Plant

[Asia Economy Reporter Oh Hyung-gil] Woongjin Energy, the only domestic producer of solar ingots and wafers, is facing bankruptcy next month. Despite filing for corporate rehabilitation in 2019 due to struggles against the onslaught of Chinese solar products, the situation has worsened.

LG Electronics will cease its solar module business at the Gumi plant on the 30th of this month. There are concerns that the added value amounting to 4.3412 trillion KRW in related industries in the Daegu-Gyeongbuk region will disappear.

Some companies cannot help but lament as the Yoon Seok-yeol administration focuses on fostering the nuclear power industry under the ‘nuclear phase-out’ policy. These are companies related to renewable energy such as solar and wind power. Once spotlighted as the main players of ‘low-carbon green growth,’ they now complain that they have been sidelined compared to the nuclear power plants that the new government dreams of reviving.

President Yoon plans to hold bilateral talks on nuclear exports with the Czech Republic, Poland, and the Netherlands during the NATO summit in Madrid, Spain, on the 27th. The new government is putting its weight behind ‘saving nuclear power’ to the extent that President Yoon declared he would “run all out for nuclear sales.”

The government plans to urgently place orders worth over 1 trillion KRW by 2025 to resume construction of Shin Hanul Units 3 and 4, invest 670 billion KRW in nuclear research and development (R&D) this year, and more than 3 trillion KRW by 2025, along with bold financial support. The strategy is to develop the nuclear power industry to create a balanced energy mix in an era of energy resource supply crises.

However, there are criticisms that government support is excessively skewed toward nuclear power. According to the nationally determined contribution (NDC) confirmed last year, South Korea’s renewable energy power generation is expected to reach 185.2 TWh by 2030, accounting for nearly 30.2% of the energy mix. This generation scale is larger than nuclear power’s 146.4 TWh and 23.9% share.

More investment should be made, but the reality is the opposite. Renewable energy generation was only 43 TWh in 2021, accounting for 7.5% of the total. This means it must increase more than fourfold over the next nine years. Meanwhile, nuclear power generation exceeded its target last year with 158 TWh.

The government plans to increase the share of nuclear and renewable energy while reducing fossil fuel use to achieve carbon neutrality, but there is no concrete investment plan.

Last month, at the opening ceremony of the 28th World Gas Conference (WGC) held in Daegu, President Yoon stated, “We will fulfill our responsibilities and roles in the international community’s efforts to achieve carbon neutrality,” and emphasized, “We must reasonably mix nuclear power, renewable energy, and natural gas.”

Another problem is that the renewable energy industry is virtually decimated. Except for Hanwha Chemical (solar) and Doosan Enerbility (wind), most large corporations have withdrawn from solar power generation, and small and medium-sized enterprises are limited to importing and reprocessing Chinese products for sale.

There are also concerns that the renewable energy value chain may be dominated by China. According to the Federation of Korean Industries, China accounts for 63% of the global polysilicon market, 95% of the ingot market, 97% of the wafer market, and 79% of the solar cell market. Additionally, six of the top ten global wind turbine manufacturers are Chinese companies.

The industry appeals that active government support is urgently needed from the perspective of energy security. A solar power industry official said, “It is necessary to increase tax incentives for investment in renewable energy and simplify licensing procedures, as well as implement protective measures to foster the renewable energy industry.”