Jan. 22 (Bloomberg) -- South Korea’s government, which has spent $2.6 billion to foster a domestic market for clean energy, plans to change the way it subsidizes renewables to encourage private energy providers to take more initiatives on their own.
Under the plan, a certain amount of subsidies will be paid depending on the renewable source and its energy yield rather than a set ratio of subsidies in excess of base tariffs, the Ministry of Knowledge Economy said in an e-mail today.
“So far, the government has led” the creation of the renewable energy market, Vice Minister Cho Seok said in the statement. The revision “will motivate the private market to make commitments for self-survival and competitiveness.”
The government has spent 2.77 trillion won ($2.6 billion) in subsidies and loans from 1993 to 2012 to bolster renewable energy use in homes, buildings and other facilities. The push gave Korea renewable energy capacity equivalent to 320,000 tonnes of oil equivalent, the ministry said today.
In 2012, the government introduced a compulsory quota requiring that the country’s power generators get 2 percent of their energy from renewable sources. The renewable portfolio standard, or RPS, will be raised to 10 percent by 2022.
--Editors: Iain Wilson, Jason Rogers