General Framework
As indigenous energy resources are poor, Korea has to rely almost entirely on imports to meet its energy needs. In 1999 the dependency rate on imported energy, including nuclear energy, was 97,2% and its cost nearly amounted to 22,6 billion USD, equivalent to 18,9% of the nation's total inbound shipments. The high rate of increase in energy demand is expected to persist in the future because of expected sustained economic growth, despite nation-wide efforts driven by the government to encourage energy conservation and higher energy efficiency. In these circumstances, development and dissemination of renewable energy are crucial for meeting many challenges, including reducing dependence on imported energy, diversifying energy resources and supply systems, expanding Korea's export of energy technologies, reducing environmental pollution and eventually alleviating the energy burden of the national economy.
In recognition of the necessity to enhance the effort of dissemination of renewable energy, the Government amended the "Promotion Act for New and Renewable Source of Energy (NRSE) Development, Utilization and Dissemination" in late 1997. The Major objective of this Act is to increase the share of renewable energy to the national energy supply from 1,03% in 1998 to 2,0% in the year 2006.
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National Programme
Based on the Act, the ministry of Commerce, Industry and Energy (MOCIE) published on aggressive action program named "Three-years National plan for NRSE Technology Development and Dissemination", which covers the period 1999-2001. The national PV program has been modified in order to both propel current R&D and enhance utilization of developed technologies.
The key goals of the new program are:
- development of high efficiency thin film solar cells
- mass production of c-Si solar cells and balance of systems
- standardization of performance test and evaluation
- field test for solar-roofs and BIPV
However, the Government support for PV activities was moderate in 1999 due to, in large part, the foreign currency crisis in Korea. The MOCIE and the MOST funded various R&D and demonstration projects. The MOST provided funding for R&D only. In 1999 the total budget for R&D was 1 382 MKRW which corresponds to a half of that invested in 1998 (2 839 MKRW). The budget for demonstration was 454 MKRW in 1999, and it was 1 200 MKRW in 1998. Until now no public funding has been allocated for market stimulation.
The Korea Photovoltaic Research Association (KOPRA) made up of members from research institutes, universities and industries gives a considerable contribution to the execution of R&D program by carrying out feasibility studies and making suggestion to the Government.
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Research, Development and Demonstration
The R&D projects supported by the Government in 1999 are divided into four categories: materials and solar cells, balance of system (BOS), system technology and performance evaluation. The highest priority has been given on solar cells, especially thin-film solar cells. National Laboratory such as the KIER and universities play a leading role in R&D on thin-film solar cells. In the case of CIGS solar cells, the use of binary compound as evaporation source as well as the improvement of efficiency was studied and have achieved its efficiency more than 15% already. The development of CdTe solar cells using CSS (close-spaced sublimation) method and fabrication of GaAs by MOCVD are still under way. In 1999 a joint project among industry/institute/university was newly started to develop multi-crystalline solar cells and modules and its application to the rooftop system. This project includes the development of inverters for distributed grid-connected systems.
In 1999 two on-grid PV systems and one PV-diesel hybrid system were installed under this program. A 12 kWp on-grid system was installed on the roof of a public building owned by Changwon municipality. This system together with a 10 kWp on-grid system installed at the KEMCO aimed at the demonstration of on-grid system and enhancing the public awareness of the PV. The PV-diesel hybrid system with a power of 10 kWp system was installed at a shelter house located at 1500 meter altitude in Hanra mountain, Cheju island. In 2000 five on-grid PV systems were installed. The all installed systems have 10 kWp capacity, among which three systems were installed in the building of college or high school and the other installed for specific applications like water pumping.
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Industry Status
LG Industrial Systems and Samsung Electronics produced PV modules. At the end of 1999 the total production capacity was 1500 kWp and the total production volume was 500 kWp remaining at the same level that of the previous year. The main steps of the production process and the technical characteristics of the modules remain unchanged. LG Industrial Systems produced PV modules using solar cells supplied by High Solar Company and solar cells imported from Siemens Solar Industries in USA. High Solar company became independent from former LG Siltron Co. in May 1999.
In 1999 LG Industrial Systems produced only one type of modules with a rated output power of 50 Wp. In 1999 Samsung Electronic Company produced about 300 kWp of PV modules using mc-Si PV cells supplied by BP Solarex, USA. Only one type of modules with a peak output of 50 Wp was produced.
Depending on the PV system type installed, system prices ranged between 25 000 KRW/Wp and 15 000 KRW/Wp. In the case of off-grid system, the system price was lower as the system size increased. The price is 25 000 KRW/Wp for a street lighting PV system with a unit power capacity of 200 Wp. An off-grid system with a power of 10 kWp for a shelter house at high altitude was installed a price of 20 000 KRW/Wp. The system price of on-grid systems is lower than the off-grid systems, because the battery cost can be saved in the case of on-grid systems. The average price was 14 400 KRW/Wp. 1 USD was equivalent to 1 188 KRW approximately in 1999.
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Market Development
The PV market was still dominated by off-grid non-domestic sector that occupied about 82,5% of total installed power followed by off-grid domestic sector with a market share of about 9,1%. Among the various off-grid non-domestic applications, telecommunication is still the largest sector of application, followed by lighthouse, street lighting, etc. The largest application sector in 1999 was PV systems for the aviation warning lamps of the high-voltage transmission tower, which were constructed by the KEPCO.
The installed capacity of PV systems in Korea at the end of 1998 was 3 459 kWp, almost doubling over the recent five years. The total installed PV power in 1999 was 518 kWp, which is a few percent more than 507 kWp achieved in 1998.
The share of off-grid domestic sector is about 9%. The PV-diesel hybrid system for remote islands and isolated houses take the large part of this market sector. These systems were essentially installed under the Government demonstration or filed test programme. However, only one system with a capacity of 10 kWp was installed in 1999. In 1999, two distributed on-grid systems with an installed capacity of 10 and 12 kWp started their operation. This sector accounted for only about 8% as of end 1999.
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Table 1. PV installations for various applications in 1999
| Sub-market / application |
Installed capacity
[kWp] |
| Residential and electrification |
44 |
| Telecommunications |
55 |
| Lighthouse and street light |
254 |
| Emergency telephone |
35 |
| Road, aviation signalling |
10 |
| Inspection of water quality |
19 |
| Other |
101 |
| Total |
518 |
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Future Outlook
At present, high cost is the main hindrance to the full-scale application and market expansion of PV systems. In addition, there are no market incentives or subsidies for PV system installation and electricity production in Korea. For some time, it is unavoidable that the Government, local communities and public organizations including the KEPCO continue to play a dominant role in the PV market. We expect the PV technology will become more competitive in stand-alone systems for rural electrification in the near-term.
In the long-term, PV application areas will expand to grid-connected systems such as solar rooftop or building integrated systems in the urban areas.
In recognition of the importance of PV technology and to increase the domestic market volume of PV system to an appropriate extent in near-term, creating a near-term targets for installed PV capacity was discussed, but not reached a concrete conclusion yet until the end of 1999.
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Further reading about the Republic of Korea
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