'Jeju Renewable Energy' Also Competes on Price... Participating in Power Bidding from February

Ministry of Industry Holds 'Electricity Market Improvement Direction Briefing'
Renewable Energy Bidding System and Jeju Pilot Project

Starting next month, renewable energy in Jeju will participate in the electricity market bidding and compete just like conventional power generators. The principle of output control based on price, such as determining the dispatch order by price, will also be applied to renewable energy.

On the 26th, the Ministry of Trade, Industry and Energy held the '2024 Electricity Market Improvement Direction Briefing' at COEX in Seoul, attended by over 150 experts from the power industry, academia, and related organizations.

This briefing was organized to introduce this year's electricity market improvement directions and key initiatives by sector to market participants in response to recent electricity market conditions and anticipated future changes, as well as to gather on-site opinions regarding market system changes.

Starting with the electricity market improvement directions, presentations and Q&A sessions were held on new electricity market systems by related organizations, including the Jeju pilot project, the Special Act on Distributed Energy Activation and activation plans, expansion of direct electricity trading following amendments to the Electricity Business Act, and the establishment of a clean hydrogen power generation bidding market.

Beyond the Yeongdeok Wind Power Complex, the first large-scale wind power complex in Korea, a brilliant New Year is rising. The year 2021 is expected to be the starting point of South Korea's energy transition, following its declaration of carbon neutrality by 2050. In particular, wind power, which is rapidly growing worldwide, is anticipated to lead the transformation to renewable energy. We hope that South Korea's "Made in Korea" wind power, equipped with world-class wind power technology, will carve new hope and vigorously advance across the globe. Shot with a Nikon D5 camera and a 24-70 lens using multiple exposures. / Uljin, Gyeongbuk - Photo by Dongju Yoon doso7@

First, from February this year, a renewable energy bidding system will be implemented in Jeju Island, and real-time and ancillary service markets will also be established.

Currently, the electricity market establishes generation plans for the next day on an hourly basis one day in advance, which limits the ability to respond to the variability of renewable energy such as solar and wind power occurring on the day. Accordingly, starting with Jeju, where the renewable energy share is high and issues of demand and supply stability and output control are urgent, market system reforms have been promoted to strengthen the responsibility of renewable energy and improve power system flexibility.

The renewable energy bidding system aims to have renewable energy, which is currently purchased preferentially without separate bidding, submit bids including price and forecast generation amount, enabling centralized dispatch and establishing the principle of output control based on price. Controllable renewable energy with a single or aggregated (VPP) capacity exceeding 1 MW will receive compensation equal to that of conventional generators, such as capacity payments, when participating in the electricity market bidding, and will bear responsibility as a main power source, including compliance with dispatch instructions. Participation in renewable energy bidding is mandatory for capacities exceeding 3 MW.

To improve the accuracy of electricity trading by reflecting real-time supply and demand conditions, a real-time market with 15-minute intervals will be established in addition to the existing day-ahead market. An ancillary service market, where reserve power is commoditized and traded, will also be introduced.

Along with this, the amendment to the Electricity Business Act (May), which includes various measures to expand direct electricity trading such as renewable energy electricity storage and sales businesses, and the enforcement of the Special Act on Distributed Energy (June) are expected by the Ministry of Trade, Industry and Energy to support the expansion of distributed power sources and the creation of new industries. In June, the world's first clean hydrogen power generation bidding market will be established to lead the expansion of clean hydrogen supply and the related ecosystem.

Lee Ok-heon, Director of Electricity Policy at the Ministry of Trade, Industry and Energy, said, "Last year, our electricity market recovered from external shocks while confirming tasks requiring institutional improvements such as securing response capabilities to international energy price changes and stable system operation. This year, we will promote institutional reforms to activate various new power industries such as distributed energy and direct electricity trading, diversify the electricity market including the introduction of contract markets, and strengthen the autonomy and responsibility of market participants."