A Major Boost for SMEs to Overcome RE100 Climate Trade Barriers
Paju City in Gyeonggi Province has become the first local government in the country to sign a power supply agreement with local companies through a direct Power Purchase Agreement (direct PPA), solidifying its role as a leading public renewable energy project operator supporting the realization of RE100, which has recently emerged as a so-called 'climate trade barrier.'
Paju City is the first local government in the country to sign a power supply agreement through a direct Power Purchase Agreement (direct PPA) with companies in the region. Photo by Paju City
Paju City announced on June 10 that it had signed a public renewable energy power trading agreement with nine local small and medium-sized enterprises (Kyungsung Industry Co., Ltd., Samsung Special Brake Co., Ltd., Sunil Safe Manufacturing, Spacetalk Co., Ltd., Shindo Industry Co., Ltd., C.&C Co., Ltd., Chilseong Co., Ltd., Hanul Herbal Medicine Co., Ltd., and Hyunjin Co., Ltd.) at the city hall's main conference room on June 9.
The agreement also included Paju City Tourism Corporation, the renewable energy producer, and SK Innovation E&S, a partner company with legal status as a power supplier under current law that supports power trading brokerage.
Paju City's renewable energy supply plan is significant in that it moves beyond the existing large corporation-centered RE100 discussions, enabling small and medium-sized enterprises to secure stable renewable energy under local government support, thereby overcoming international climate trade barriers.
Starting in January 2026, Paju City plans to directly supply renewable energy to local small and medium-sized enterprises through a 1.2MW solar power plant at the Munsan Water Purification Plant for 30 years. The supply price is set at 160 KRW/kWh (fixed for 30 years), which is more cost-effective than the average electricity rate of Korea Electric Power Corporation, which rises by an average of 5% annually.
Through this direct Power Purchase Agreement (direct PPA), the city aims to present a new model for public renewable energy projects led by local governments that directly produce and supply renewable energy, while simultaneously achieving electricity rate stabilization, reduction of fossil fuel use, and enhanced export competitiveness for local small and medium-sized enterprises.
A representative from Hanul Herbal Medicine Co., Ltd., one of the participating SMEs, stated, "With exports to 17 countries including the United States, the demands for ESG and RE100 are becoming increasingly stringent. We expect that Paju City's direct PPA supply will greatly help us achieve our RE100 goals in the future."
A representative from Shindo Industry Co., Ltd. emphasized, "This direct PPA supply by Paju City is considered a very practical and proactive opportunity for companies. It will not only reduce electricity costs but also enhance our ESG capabilities, making it a realistic means of energy transition for small and medium-sized enterprises."
Kim Kyoungil, Mayor of Paju City, commented, "This agreement is a leading model for the era of energy transition and will serve as a groundbreaking foundation for small and medium-sized enterprises to achieve RE100, overcome trade barriers, and enhance global competitiveness. Paju City will continue to actively support the energy transition of businesses and strive to become a leading RE100 city that grows together with enterprises."
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