Government to Expand Distributed Power Generation to 18.6% by 2027

[Asia Economy Sejong=Reporter Dongwoo Lee] The government plans to increase the share of distributed power sources to 18.2% by 2027 to resolve domestic power supply instability. Distributed energy generation refers to the concept of producing electricity on a medium to small scale near the area where energy is consumed. It mainly includes combined heat and power generation such as district energy and renewable energy like solar power.

The Ministry of Trade, Industry and Energy announced on the 14th that it has finalized the '3rd Basic Plan for Intelligent Power Grids' through the 2050 Carbon Neutral Green Growth Committee. The Basic Plan for Intelligent Power Grids is a statutory plan established every five years. In this plan, the ministry set a goal to raise the share of distributed power sources from the current 13.2% to 18.6% in five years, an increase of 5.4 percentage points.

The global smart grid market is expected to grow rapidly, centered on the distributed resource market. Leading countries in this field are allowing market participation of distributed resources and actively promoting the establishment of flexible power systems. In line with this, the government plans to invest 29 billion KRW by 2025 in technologies that store surplus electricity as heat and hydrogen to activate distributed energy. It also plans to secure resources for power supply flexibility by establishing a system that utilizes electric vehicle batteries connected to the power grid through chargers as energy storage systems (ESS).

The introduction of a Korean-style integrated power plant (VPP) market for the resource control of distributed energy will also be promoted. After piloting a renewable energy bidding system in Jeju Island at the end of this year to lay the foundation for the VPP market introduction, the plan is to expand it nationwide by the end of 2025. The Ministry of Trade, Industry and Energy also plans to build a smart power consumption system through the expansion of the demand response (DR) market and the establishment of advanced metering infrastructure (AMI).

Efforts will also be made to digitalize the power grid to respond to real-time volatility, activate microgrids, and build an industrial ecosystem to support the spread of intelligent power grids. The ministry explained that it will invest about 3.7 trillion KRW in the intelligent power grid sector over the next five years to mitigate power supply volatility, flexibilize power consumption patterns, and strengthen power system stability.