REC Doubles in 2 Years and 6 Months
CF100 Expected to Save Purchase Costs
"RE100 Overlapping Membership Not a Big Issue"
Major companies such as Samsung Electronics, SK, and Hyundai Motor Company responded positively to the government's encouragement to participate in discussions on the CF100 (Carbon-Free Energy 100%) policy. CF100 stands for '24/7 Carbon Free Energy,' meaning the use of only carbon-free electricity 24 hours a day, 7 days a week.
Companies already participating in RE100 (Renewable Energy 100%) have shown strong interest in CF100, citing the doubling of Renewable Energy Certificate (REC) prices over the past two and a half years, which has increased their financial burden. Unlike RE100, which requires the exclusive use of renewable energy such as solar power, CF100 allows the use of nuclear power, hydrogen power generation, and others.
A panoramic view of Wolseong Nuclear Power Plant, Yangnam-myeon, Gyeongju-si, Gyeongsangbuk-do. [Image source=Yonhap News]
The Ministry of Trade, Industry and Energy announced that, together with the Korea Chamber of Commerce and Industry, it will hold the launch ceremony of the 'Carbon-Free Energy (CFE) Policy Forum' on the afternoon of the 17th at the Press Center in Jung-gu, Seoul. Participants include Samsung Electronics, SK, Hyundai Motor Company, POSCO, Doosan Enerbility, GS Energy, SK E&S, and Hanwha Energy. RE100 is a campaign to procure electricity solely from renewable energy sources such as solar power. CF100 permits nuclear power, hydrogen, and fossil fuel power generation with carbon capture and storage (CCS). The initiative was launched in September 2021 by Google, the UN, and others, with about 100 companies and institutions, including Microsoft (MS), currently developing the system.
The Ministry plans to establish domestic regulations related to CFE by the end of this year to encourage corporate participation and to implement pilot projects starting next year. The Korea Chamber of Commerce and Industry will be responsible for managing the system. A ministry official stated, "The aim is to create a system that fits Korea's reality by encompassing not only renewable energy but also nuclear power and hydrogen, thereby reducing the burden on companies," adding, "We will prepare to promote corporate pilot projects next year."
Companies have shown a positive response to the dissemination of the CF100 system. Being able to mix nuclear and hydrogen power generation with renewable energy is expected to help reduce costs. Companies such as Samsung Electronics, SK, and Hyundai Motor Company, which have already joined RE100, are positive about CF100. RE100 member companies find it difficult to cover 100% of their energy needs solely through self-generation (installation and use) of renewable energy, so they purchase RECs and green premiums to receive carbon reduction credits. According to the Korea Power Exchange price list, the REC price rose from 35,500 KRW on December 31, 2020, to 71,200 KRW on the 11th of this month, doubling (101%) in price.
Professor Jeong Dong-wook of the Department of Energy Systems Engineering at Chung-Ang University explained, "Under RE100, even if 50% of a facility's electricity is procured from renewable energy, if the remaining 50% is not covered, companies must purchase renewable energy certificates. However, under CF100, if electricity is procured 50% from renewable energy and 50% from nuclear power, no additional costs related to renewable energy certificates are required."
Companies remained tight-lipped about whether they would join CF100, stating that discussions are still at the study level. However, they plan to participate in CF100-related discussions, including the launch ceremony. Importantly, the prevailing response is that there is no problem with joining both RE100 and CF100 simultaneously. The Climate Group, a UK-based multinational non-profit organization that manages RE100, and the Carbon Disclosure Project (CDP) have not imposed any sanctions on RE100 member companies such as Google or Microsoft that are promoting CF100.
SK Group, which is involved in the hydrogen business, and Doosan Enerbility, a nuclear power company, expect business opportunities to increase if CF100 becomes widespread. A representative from one of the companies participating in the launch ceremony said, "Due to Korea's poor renewable energy supply infrastructure, many companies recognize the need to introduce CF100."
Some have expressed concerns that the CF100 condition of using only carbon-free electricity produced in the country where the business site is located 24 hours a day, 7 days a week, may be more challenging to meet than RE100. IT service companies like Google and Microsoft have already achieved RE100 and thus have the flexibility to consider joining CF100, but domestic manufacturers find it difficult. A representative from a participating company said, "It is difficult to mention joining CF100 prematurely until a global consensus is formed that nuclear power is also considered 'carbon-free energy.'"
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