The government is pushing to overhaul the industrial electricity rate system by raising rates for the evening and nighttime hours and lowering rates for the daytime. The aim is to steer industry to use power during the day as daytime power supply increases with the expansion of solar power generation.
The Ministry of Climate, Energy and Environment said in its energy transition work plan released on the 1st that it will draw up this industrial electricity rate overhaul within the first quarter. The current average unit price for industrial electricity is about 180–185 won per kWh, with nighttime rates 35%–50% cheaper than daytime.
The government said that as the share of renewable energy grows, the structure is shifting to a surge in daytime power supply, creating a need to adjust demand patterns by fine-tuning the rate system. The plan is to induce industrial sites to absorb solar generation through this.
The ministry also plans to present within the year a plan to introduce regional electricity pricing that reflects transmission costs in rates. The approach would allow areas closer to power plants to use electricity at relatively lower prices. For heat pumps in dwellings, consumers will be given a choice between seasonal/time-of-use rates and general rates.
Policies to expand renewable energy will also accelerate. The government will increase renewable energy installed capacity to 100 gigawatts (GW) by 2030 and will establish 500 "sunlight income villages" this year and 2,500 by 2030, where residents share solar project revenue. In wind power, it will push within the year a leading project for "wind income villages."
For offshore wind, the government plans to launch an "Offshore Wind Power Committee" chaired by the prime minister in the second quarter. To smooth grid connections for renewable projects, it will both amend the Electric Utility Act and expand flexible connections. Flexible connection is a method of connecting to the grid on conditions such as being subject to output control during hours of transmission congestion.
A power market overhaul was also signaled. The ministry will strengthen the independence of the Electricity Commission and promote the establishment of a new "Power Supervisory Service" to oversee the power market and system operations. In addition, in preparation for coal phaseout policies, it plans within the first half to draw up measures for restructuring and reorganizing the functions of the Korea Electric Power Corporation generation subsidiaries.