2023-10-19 01:41:50
Rep. Lee Jang-seop said, “The pressure to increase electricity rates is intensifying due to the Yoon administration’s new and renewable energy policy… “The burden on the public is expected to increase.”
[인더스트리뉴스 이건오 기자] Due to the new and renewable energy policy of the six domestic power generation companies, the REC purchase cost to be paid by 2030 reached 33 trillion won, and it was suggested that an increase in REC market prices and an increase in electricity rates is expected.
Due to the new and renewable energy policy of the six domestic power generation companies, the REC purchase cost to be paid by 2030 reached 33 trillion won, and it was suggested that an increase in REC market prices and an increase in electricity rates is expected. [사진=인더스트리뉴스]
Lee Jang-seop, a member of the Democratic Party of Korea who is a member of the Trade, Industry, Energy and Small and Medium Venture Business Committee, said that new and renewable energy projects from six domestic power generation companies, including △Korea Hydro & Nuclear Power, △Korea Midland Power Company, △Korea Southern Power Company, △Korea South-East Power Company, △Korea Western Power Company, and △Korea East-West Power Company, will provide renewable energy according to the financial soundness plan. As a result of analyzing data related to energy reduction plans, it was revealed that the REC purchase cost to be paid by the six power generation companies over the seven years from 2024 to 2030 is expected to exceed 33 trillion won.
According to the ‘2022-2026 fiscal soundness plan’ submitted to the Ministry of Strategy and Finance by the six power generation companies in August last year and the adjustment plan announced by the six power generation companies in June this year, the original new and renewable energy budget total was KRW 7.5243 trillion to KRW 2.2432 trillion. It was revealed that there was a cut (29.8%). In particular, in the case of Korea Midland Power Company, it was revealed that it was effectively giving up on new and renewable energy power generation projects by returning 14 solar power permit projects early this year.
Renewable energy reduction plan according to the fiscal soundness plan from 2022 to 2026 [자료=발전6사, 이장섭의원실]
Rep. Lee Jang-seop said, “The reduction in investment costs for new and renewable energy by the six power generation companies is expected to have a significant negative impact on the growth of the domestic new and renewable energy industry.” He added, “In addition, we hope to achieve RE100, which has become a global standard in the international market.” “It is expected to cause various problems, including an increase in REC transaction prices due to the rapid increase in demand from the industry.”
He continued, “In fact, the REC spot market price, which peaked in 2018, has remained stable, but the REC spot market price has decreased due to the increase in demand for new and renewable energy due to RE100 and the contraction of the new and renewable energy market due to the Yoon Seok-yeol government’s new and renewable energy policy. “It is increasing rapidly,” he added.
Annual average REC spot market price over the past 5 years [자료=전력거래소, 이장섭의원실]
Meanwhile, domestic power generation companies charge the Korea Power Exchange for implementation costs arising from RPS implementation, and KEPCO settles the costs. This is called the fulfillment cost settlement fee. The implementation cost settlement amount is calculated by adding up the implementation costs of each power generation company to calculate an appropriate standard price. Power generation companies with implementation costs higher than the standard price suffer a loss when they receive settlement.
The six domestic power generation companies implement RPS through self-generation of new and renewable energy and the purchase of RECs, but the six domestic power generation companies have drastically reduced their budgets for new and renewable energy, so the cost of RPS implementation has inevitably increased.
In addition, the six domestic power generation companies are experiencing the double whammy of having to respond to competition with private power generation companies due to rising pressure in the REC spot market price and a shortage of REC volume due to insufficient solar power fixed price bidding market.
In particular, five of the six power generation companies, excluding Korea Hydro & Nuclear Power, are in a situation where income from coal-fired power plant operations accounts for most of their total income, so they have to worry regarding the deterioration of their financial structure due to the future decline in coal-fired power generation.
2024~2030 REC purchase cost forecast for 6 power generation companies [자료=발전6사, 이장섭의원실]
According to data submitted by six power generation companies to the National Assembly’s office, the amount of RECs to be purchased over the seven years from 2024 to 2030 is expected to amount to a whopping 33.2304 trillion won. It is pointed out that since KEPCO is ultimately settling the RECs purchased by the 6 power generation companies to implement RPS, the resulting burden may ultimately lead to pressure to increase electricity rates and lead to an increase in the price of civil products.
Regarding this, Rep. Lee Jang-seop said, “The cost of defining new and renewable energy as a power-driven corruption cartel under the Yoon Seok-yeol administration may not stop at the pressure on the six power generation companies and domestic companies,” and added, “The drugs that the six power generation companies must purchase for seven years starting from 2024. He emphasized, “The REC cost of 33 trillion won may eventually become a factor in raising electricity bills and the cost of living things.”
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