New Opportunities in the Energy Industry in EU & Korea
Wednesday, 5th April, Four Seasons Hotel Seoul
For immediate release
The Delegation of the European Union to the Republic of Korea, together with the Climate Change Centre hosted a seminar, on “Energy Prosumer: New Opportunities in the Energy Industry in EU and Korea” at Four Seasons Hotel Seoul, on April 5th.
The topic of the seminar represents an emerging global trend. It is commonly observed that the energy business is faced with a paradigm shift towards a low-carbon society following the Paris Agreement of 2015. The new climate regime, which will be introduced from 2020, requires the energy industry to embrace the decentralised energy generation and to facilitate the renewables market at local level.
Currently, the European Union (EU) countries are leading this trend of the renewables-based off-grid energy market. European businesses have actively sought opportunities in the “prosumer” model in which individual households and corporations produce electricity from renewable sources and supply it to neighbours and local consumers. In Korea, the Ministry of Trade, Industry, and Energy (MOTIE) announced in 2015 a new energy business strategy that included a pilot off-grid project and upgrading regulatory frameworks, indicating its growing interest in the prosumer market.
The seminar provided a timely overview of this emerging trend with a focus on European cases as a reference. It has also enhanced the discussion on how to facilitate new energy business models to cope with the new climate regime. The seminar attracted more than 200 participants from the business sector, the government, academia and research institutions, as well as NGOs.
The seminar was opened with welcoming remarks from Dr Duck- Soo Han, Chairman of the Climate Change Center, and H.E. Michael Reiterer, EU Ambassador-designate to the Republic of Korea.
In his welcoming speech, Chairman Han stressed that the new climate regime would mark a complete departure from the existing energy system based on fossil fuels. In the new system, renewables will play a key role and lowering costs in grid systems will gain more significance. What is essential is to design the new regime as a source of new opportunities for businesses and benefits for citizens, not a significant burden, added Chairman Han.
Ambassador-designate Reiterer said, “To successfully implement the Paris Agreement, it is important to share a sense of urgency and commitment amongst all stakeholders towards the new climate regime. It is of great significance to explore new ways to encourage business and economic growth as solutions to climate change. In the EU, we look for a transition to climate resilient, competitive and sustainable economies with low greenhouse gas emissions. Creating new business models and approaches represent new opportunities that shall not be missed.”
The main presentations were delivered by renowned experts including Sanghoon Lee, Director of Green Energy Strategy Institute, Dr Pieter Vingerhoets from VITO-EnergyVille/the S3C project, and Goran Krajačić, professor at the University of Zagreb.
To begin with, Dr Lee introduced the status of ‘energy prosumers’ in Korea and presented policy recommendations to promote the new type of energy business. With technological advancement, the decrease in generation cost with renewables – especially with solar panels, makes the cost of generation equal to or less expensive than purchasing electricity from a utility company. With the “grid parity” at hand, the prosumer model demonstrates a promising new energy business across the world, and now in Korea. However, he added that proper regulatory and institutional frameworks should be set in place to ensure corporate and individual consumers to have access to such options.
Professor Krajačić, an expert in renewable energy sources integration, provided a detailed overview of policies, systems, and regulations on energy prosumers in the EU. Overall, the EU expects to create 900,000 jobs and economic benefits equivalent to 190 billion euros by 2030 through the spread of clean energy under the Energy Union policy. Introducing the “Smart Energy System” to which electricity, heating/cooling, gas grids are integrated, Professor Krajačić presented four elements for smart and flexible energy supply – (i) decentralised systems; (ii) improved energy storage systems; (iii) interconnected grid networks; and (iv) demand response. In addition, he introduced off-grid systems demonstrated in many islands in Europe, as they indicate that smart and inclusive systems can be built on a larger scale. To promote the prosumer system, Professor Krajačić also pointed out the importance of transparency in information sharing as individual prosumers should be able to compare different prices and options in adopting this model.
Finally, Dr Vingerhoets, a leading expert in the smart grid and grid interaction, introduced a few European cases where peer-to-peer (P2P) energy business or the energy community model have been realized, based on his analysis of behavioural patterns of consumers. Starting with the EU Clean Energy Package, which aims to the 40% reduction of greenhouse gas emissions by 2030, Dr Vingerhoets explained what it takes to achieve the goal – i.e. “increase energy efficiency, exercise global leadership in renewable energy, supply energy to consumers at fair prices.” In particular, he stressed the diversity of consumers in light of willingness to adopt environmentally friendly options. However, behavioural change is possible depending on how incentives are designed. It should be noted that convenience is often more important than price itself to change consumer behaviour. In this regard, Dr Vingerhoets presented a few successful projects in Europe including the EnergyVille project which analyses and shares information via the ‘Sun Chart’ website, of the aerial photos of Flanders, Belgium, to identify suitable locations for installing rooftop solar panels.
In the following session, leading Korean and European experts from major companies and institutes such as Korea Power Exchange and MOTIE, joined a panel discussion covering the technological, business, and policy aspects of the prosumer model. All panellists agreed that proper regulations, price competitiveness and technological maturity & reliability are key to the “prosumer” business model. It was also discussed that consumer behaviour should be given a serious consideration.
The current Korean market is not attractive to energy prosumers, because of low-priced electricity, various subsidy programmes for renewables, and the monopolised electricity market, according to various experts. Although the profitability of off-grid systems powered by solar PVs is estimated to be over 11%, the realisation of a more decentralised system requires overcoming the current hurdles mentioned above. The opening-up of the electricity market to individuals and businesses would be the right direction to facilitate the energy system reform. Given that Korea’s new & renewable energy sources target is 11% by 2035, it was also suggested that the understanding of consumer behaviours the new electricity market will be organised by “early adopters” and therefore there should be tailored strategies to mobilise consumers in this category – i.e. those active in environmental movement, urban farming, or renewable energy sources.
The active discussion highlighted the positive outlook for new energy business opportunities in Korea.
The seminar is part of the EU Climate Change Outreach project* funded under the EU Partnership Instrument as well as the Climate-Energy-Business initiative series organised by the Climate Change Centre. The EU Climate Change Outreach Project aims to raise climate change awareness in Korea. In that respect, three contests for young photographers, women and children are open for applications by 27 April 2017. For more information, visit: https://eeas.europa.eu/delegations/south-korea/23577/press-release-eu-climate-change-outreach-project-korea_en).
For more information:
Climate Change Center
02-766-4366 | email@example.com
EU Climate Change Outreach Project