Four locations — South Jeolla, Jeju, Busan, and Gyeonggi — have been designated as specialized zones for distributed energy. In the designated zones, direct power transactions between power generators and electricity users are allowed, and regulatory exceptions will enable the introduction of various rate plans.
The Ministry of Climate, Energy and Environment said on Feb. 5 that it held the 36th Energy Committee meeting at the Grand Hyatt in Yongsan-gu, Seoul, chaired by Minister Kim Seong-hwan.
At the Energy Committee meeting, the first since the launch of the Ministry of Climate, Energy and Environment, the 8th-term civilian members starting new terms were appointed, and the designation plan for distributed energy specialized zones was reviewed and approved.
Based on the Special Act on Activation of Distributed Energy, the distributed special zone is a local-produce, local-consume system that produces energy near demand centers and consumes it there instead of using long-distance transmission networks.
Jeju, which has abundant renewable energy resources and has established innovative systems such as a renewable energy bidding system and a real-time market, was designated as a distributed special zone. With this designation, Jeju Province plans to pursue projects including ▲ P2H (converting surplus renewable power into thermal energy using heat pumps) ▲ virtual power plants (operators integrate renewable energy and energy storage systems to participate in the power market and develop revenue models) ▲ V2G (using electric vehicle batteries like energy storage systems and participating in the power market).
South Jeolla has the highest solar adoption rate in the country, but output curtailment is frequent due to grid constraints. By attracting data centers to Haenam and Yeongam, where solar power plants are concentrated, the province will realize local production and consumption. It will conduct diverse demonstrations of microgrid technologies that optimize power production and consumption with artificial intelligence (AI) at industrial complexes and universities. It will also promote a project to deploy energy storage systems on distribution networks where 99.6% of renewable energy is located, minimizing the queue for renewable connections while improving distribution network operations.
Busan and Gyeonggi are regions where demand is high relative to supply and require optimized demand management. Busan will install large-scale energy storage systems and use them in industrial complexes, ports, and data centers to create a model that saves on electricity bills. Gyeonggi Province plans to demonstrate a project that uses a microgrid consolidating solar power, energy storage systems, and electric vehicle charging stations inside parks to charge EVs with stored power and generate revenue.
An official of the Energy Committee said, "Ulsan, South Chungcheong, and North Gyeongsang, which were put on hold at this Energy Committee meeting, will be promptly reconsidered at the next committee meeting after additional discussions."
Meanwhile, the Energy Committee also reviewed and approved the 7th Basic Plan for the Rationalization of Energy Use on the same day. The plan includes a goal to reduce final energy consumption from 212 million toe (ton of oil equivalent, based on the heat content of 1 ton of crude oil per 1 toe) in 2024 to 211 million toe by 2029.
Based on the "energy intensity," which refers to energy use relative to gross domestic product (GDP), the policy aims to achieve a total energy efficiency improvement of 8.7% over the next five years. Energy use of 0.092 toe per 1 million won of GDP in 2024 would be reduced to 0.084 toe by 2029.
However, industry sees these targets as difficult to achieve. This is because electricity demand is surging due to data center expansion, and both summer cooling and winter heating demand are expected to grow due to climate change.