RE100 initiatives and market expansion

RE100 is a global initiative led by the Climate Group in partnership with CDP (Carbon Disclosure Project) that aims to accelerate the transition to 100% renewable energy. It brings together influential companies committed to sourcing 100% of their electricity consumption from renewable energy sources, such as solar, wind, and hydro. By setting clear targets and timelines, RE100 encourages businesses to take a leadership role in driving the adoption of renewable energy and combating climate change.

To achieve RE100 commitments, major companies have increased their participation and engagement with the renewable energy market. Most have committed to installing its own renewable energy systems, demonstrating visible sustainability efforts and its role as an independent power producer. Others have opted to enter long-term contracts with current renewable energy providers to purchase electricity at a fixed rate - this provides price stability and supports the development of renewable energy projects by independent suppliers. Alternately, Renewable Energy Certificates (RECs) can be purchased to certify that the electricity consumed is matched by renewable energy generation, allowing for flexibility for businesses unable to generate renewable energy on-site or access direct supply.

In association with the trends in RE100, South Korea has implemented significant policy changes to facilitate the adoption of Power Purchase Agreements (PPAs) for renewable energy, aiming to diversify its energy mix and promote sustainability.

Direct PPAs Legalization

In March 2021, the National Assembly amended the Electric Utility Act, enabling companies to enter into direct PPAs with renewable energy producers. This amendment allows electricity consumers to purchase power directly from independent power producers (IPPs) without routing through the Korea Power Exchange (KPX) or the Korea Electric Power Corporation (KEPCO).

Third-Party PPA Guidelines

On August 28, 2023, the Ministry of Trade, Industry and Energy (MOTIE) revised guidelines for third-party PPAs to align them with those established for direct PPAs. This harmonization aims to streamline processes and encourage more corporate participation in renewable energy procurement.

Renewable Portfolio Standard (RPS) Amendment

The National Assembly increased the cap on the Renewable Portfolio Standard obligation from 10% to 25%. This change mandates large power producers to source a higher percentage of their electricity from renewable sources, thereby stimulating demand for renewable energy and associated PPAs.