South Korea plans to bump its renewable-energy investments by 60 percent this year to reduce its reliance on foreign fuels, the government said Monday.
The Ministry of Knowledge and Economy said the country intends to spend 194.4 billion won ($193 million) on technologies and projects, including solar, wind and biofuels, this year. The decision came after South Korea’s spending on importing crude oil, coal and natural gas jumped more than 60 percent in first six months of 2008 than in the same period in 2007.
South Korea doesn’t produce crude oil domestically. Instead the country relies heavily on foreign imports to power its large manufacturing and shipping industries. Although the country’s oil imports have remained flat, the rising crude oil prices have increased its spending on fuels, according to the U.S. Energy Information Administration, which lists South Korea as the ninth-largest oil consumer and fifth-largest oil importer in the world.
Solar and wind projects produce electricity, not fuel, so they wouldn’t help ease oil prices, but could potentially help reduce electricity and natural-gas prices, which also have spiked. All the rising energy costs have prompted South Korea to pass policies encouraging many types of renewable-energy investments and projects.
With money for loans and research, along with a policy requiring utilities to buy solar power through long-term contracts, the country is expected to install over 1 gigawatt of solar-power capacity by 2012, according to a recent research report from the Prometheus Institute, a Greentech Media partner.
South Korea is expected to be the second fastest growing market in the next four years, according to a JP Morgan report. The research firm expects the country’s new solar-power installations, measured by their power-generating capacity, to grow 89 percent over the next four years to reach 957 megawatts (see U.S. Solar Could Surpass German Market by 2011).
U.S. and German companies have taken advantage the growing South Korean market. SunPower, in San Jose, Calif., has attributed its sales growth partly to its foray into South Korea (see SunPower Revenue Up 120%, Stock Falls and SunPower CEO Says Spain, South Korea Could Boost Solar Growth).
In June, Roseville, Calif.-based Solar Power said it had signed a contract with an undisclosed South Korean company to deliver more than $20 million worth of solar panels. The panels, enough to build a 5-megawatt power plant, are slated to be installed in a 10-megawatt solar park under development northeast of Seoul (see South Korea Expands Solar Production).
German solar-plant developer Epuron also flipped the switch on its first project in the Asian country in May. Epuron built the $14.5 million, 2-megawatt solar plant for South Korean energy-company Samchully (see Epuron Expands into South Korea).