Research Report
Ⅰ. Background and purpose
□ The Paris Agreement concluded in Paris on December 12, 2015 is a new climate change agreement for the years beyond 2020. The Agreement requires all countries to mandate their target to reduce greenhouse gas emission and to get checked their progress by the international community every five years from 2023. It also requires countries to raise 100 billion dollars of fund every year to support developing countries by 2025.
□ Keeping the pace with the international efforts, Korean government has submitted its INDC (Intended Nationally Determined Contributions) in consideration of economic development and growth by 2030. The government set its target to reduce BAU by 37 percent by 2030.
□ The Korean government proposes its policy to grow energy- related industry for the new era of climate change regime. The energy-related industry includes demand side resources trade market, energy storage system (ESS), environmental-friendly energy production facilities, energy self sufficient island project, sola power lease, zero-energy building projects and so on.
□ This research makes analysis first, on laws and policies that expands energy pro-sumer which means anyone can produce energy by themselves and sell the leftover of energy after they consumed. Second, analysis on laws and policies on an electric car industry, and third analysis on new energy industry by establishing environmental-friendly energy facilities. The research concludes with proposing the establishment of the Special Act on New Energy Industry (tent.).
Ⅱ. Main Content
□ Trend of New Energy Industry overseas
○ EU member countries, US, China, Japan and Australia also focus on developing innovative models of new energy industry such as new renewable energy and battery cars.
○ Germany has adopted new and renewable energy policy by improving energy efficiency of buildings and expanding electric cars for transportation sector. Germany plans to confirm the project for greenhouse gas-neutral country by 2050.
○ Japan has privatized its electric power sector in order to expand new energy industry in April 2016, while Australia has established policies for improving energy efficiency of lightings and medium-sized cars in accordance to its ‘national energy production plan’.
□ Analysis on Domestic Law and Policy Related to New Energy Industry
○ The analysis was made on the current Electric Utility Act, specifically on the permission of electric business, the prohibition of concurrence, the terms and conditions for electricity supply, the permission on the district electric business, and the electric power trading and the policy for it; on the Energy Use Rationalization Act, specifically on the measures for efficient use of energy, financial and taxation support, rational policy for energy use, and utilization of waste heat; on the Integrated Energy Supply Act, specifically on business permission on integrated energy, report on the provisions on heat supply, and conditions of heat producer’; on the Act on the Promotion of the Development, Use and Diffusion of New and Renewable Energy, specifically on mandatory use and supply of new and renewable energy, new and renewable energy supply certification, and obligation to blend new and renewable energy fuels.
○ This paper finds that there is a limit to nurture demand-recourses trading market, energy storage system, eco-energy town, energy self sufficient island, battery lease project, solar power lease project, zero-energy building project and so on due to the regulations in place.
□ A Way to Improve Legislations on New Energy Industry
○ This paper analyzes ‘instructions on trade including small-sized new and renewable energy generation’ in order to promote ‘electricity trade between neighbors’ as a way to encourage ‘energy pro-sumer’ in the new energy industry. It also analyzes the draft amendment of ‘small-sized electricity supply business’ under the Electric Utility Act.
○ Another analysis this paper carries out is on the provisions on ‘environmental-friendly motor vehicle charging facilities, etc. under Article 11-2 of the Act on Promotion of Development and Distribution of Environment-Friendly Motor Vehicles, determining on issues of the dissemination of e-motor vehicles and re-sell of electricity by a charging facility entity.
○ There is an issue regarding charging service provider for electric motor vehicle and demand-management provider in accordance with Article 31 (5) of the Electric Utility Act. The recently proposed draft on the Act includes electric motor vehicle charging service in the new energy industry and requires a charging service provider to register with the Minister of Trade, Industry and Energy.
○ Environmental-friendly energy facility can be promoted by allowing local residents to share a certain portion of the participation run by the local governments. The electricity produced at an environmental- friendly energy facility should be used for the local residents and the power generators should be allowed to purchase the leftover of the produced electricity.
○ The industrial convergence in response to the new era of climate change will contribute to the mitigation of GHG emissions and the improvement of energy efficiency, and eventually creating new growth engine and creating jobs. Such benefits ultimately result in the proposal of the Special Act on New Energy Industry (tent.).
○ ‘Special Act on New Energy Industry (tent.)’ provides for the purpose, definitions of new energy industry, relationship to other Acts, the establishment and implementation of basic plan and implementation plan of setting up a platform for new energy industry, registration policy for new energy business entity, new energy industry committee, special provisions on electricity trade, creation of environmental-friendly energy production facility, and cancellation and support thereof, fund raising, and mandatory installation of charging facility, etc.
Ⅲ. Expected Effect
□ With the draft Special Act on New Energy Industry (tent.), this research promotes consistent and sustainable policy to grow new energy industry for the new era of climate change regime.
□ This research can be used as legal and legislative reference to back up “the growth strategy for 2030 new energy industry” of the government.
□ With proposing the “Special Act on New Energy Industry (tent.)”, the research contributes to search for a new growth engine for the national economic development while mitigating GHG emissions and to creating new jobs for the citizens. This will encourage the change into distributed generation from the current demand-following generation.