[Exclusive] Power Fund Degraded to 'Renewable Energy Subsidy'... 6.1 Trillion Won Injected During Moon Administration

Moon Administration Allocates 6.1 Trillion Won from Electricity Fund to Renewables... Total Spending 56%
Electricity Fund Raised by 3.7% Electricity Rates... Quasi-Tax Nature Fund
Renewable Energy Budget More Than Doubled in 5 Years... Nuclear Power Only 5%

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Lee Jun-hyung] It has been confirmed that more than half of the Electricity Industry Infrastructure Fund (Electricity Fund), created from electricity bills under the Moon Jae-in administration, was invested in renewable energy projects such as solar power. In contrast, the cost spent on nuclear power accounted for only 5% of the total fund. There are criticisms that the electricity fund, which was established to stabilize electricity supply and demand, has turned into subsidies for renewable energy with highly variable power generation.

According to data submitted by the Ministry of Trade, Industry and Energy to the office of Yang Geum-hee, a member of the People Power Party, on the 28th, the electricity fund invested in renewable energy projects from 2017 to last year totaled 6.1233 trillion won. During the same period, the total expenditure of the electricity fund was 10.8934 trillion won. The electricity fund is created from 3.7% of the electricity bill paid monthly by the public. Over the five years of the Moon Jae-in administration, about 56.2% of the quasi-tax nature electricity fund was used for renewable energy projects.

The reason renewable energy projects accounted for more than half of the electricity fund is due to a significant increase in related budgets. The electricity fund allocated to the renewable energy sector increased from 801.7 billion won in 2017 to 1.6893 trillion won last year, an increase of 887.6 billion won (110.71%). Specifically, the budget for financial support such as loans for renewable energy projects jumped more than sixfold from 88 billion won to 534 billion won. The budget allocated for supporting the spread of renewable energy also increased more than threefold from 100 billion won to 313.3 billion won.

Unlike renewable energy, the electricity fund spent on nuclear power over the past five years was 561.4 billion won, accounting for only 5.1% of the total expenditure (10.8934 trillion won). This is the result of the Moon Jae-in administration steadily reducing the budget related to nuclear power in line with its ‘nuclear phase-out’ policy. In fact, the electricity fund invested in the development of core nuclear technology decreased by 12.4 billion won from 68.6 billion won in 2017 to 56.2 billion won last year. The budget allocated for this project this year is 31.2 billion won, shrinking by more than half compared to 68.6 billion won in 2017. The government’s nuclear power plant workforce training project, which had received 3 billion won annually from the electricity fund since 2012, was suspended in 2019.

Given this situation, there are criticisms that the electricity fund has turned into subsidies for renewable energy. It is pointed out that the electricity fund, which aims for the development of the power industry and stabilization of supply and demand, has been excessively invested in renewable energy, which has high intermittency depending on environmental conditions.