Green Growth and Low Carbon Development in East Asia

Fumikazu Yoshida, Akihisa Mori, Fumikazu Yoshida, Akihisa Mori

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317444206
• Edition: 1
• Topic: Business
• Subtopic: Sustainability in Business
• Index: Business

The concept of green growth, coupled with one of green economy and low carbon development, is a global concern especially in the face of the multiple crises that the world has faced in recent years- climate, oil, food, and financial crises. In East Asia, this concept is regarded as the key in transforming cheap-labour dependent, export-oriented industries towards a more sustainable development.

Green Growth and Low Carbon Development in East Asia examines the beginnings of low carbon, green growth in practice in East Asia and how effectively it has directed East Asian nations, especially Korea, China and Japan, to put environment and climate challenges as the core target zone for investment and growth. Special focus is paid to energy and international trade- areas in which these nations compete with pioneered nations of Europe and the United States to develop renewable energy industries and enhance their international competitiveness.

On the basis of the lessons learned in East Asia, together with a comparison of Russia, this book discusses the applicability and limitations of this developmental approach taken by the developing nations and resource-rich emerging economies, including the conditions and contexts in which nations are able to transition into sustainable development through the use of low carbon, green growth strategies.

Part I
Energy transition

1
Renewable energy toward green growth

Jinsoo Song

Introduction

Energy remains the key driver of social and economic development at national and international level. The energy demand is growing rapidly. To meet such increasing demand without damaging environment, the share of renewable energy should be significantly increased.

It is very fortunate that many developing countries in Asia and Africa have abundant resources of solar energy, as well as low-cost desert and arid land. Wider utilization of renewable energy should provide the foundation for not only reliable energy supply, but also, it may bring renaissance to the development of energy in developing countries. Furthermore, it can significantly contribute to enhancing the social and economic development of these countries.

Renewable energy is becoming more important in Korea with rapidly changing domestic business environment due to the frequent fluctuation of international petroleum price and UN framework convention on climate change.

Though Korea has started to focus on renewable energy industry later than other advanced countries, it is expected that the industry would be a national growth engine in the near future as the Korean government has made maximum efforts to support technological development and deployment of renewable energy in order to realize the green growth.

Significant technology advances and dramatic cost reductions have been achieved in renewable energy over the last decade in Korea. It is clear that supporting high-level research and facilitating exchange of information and experiences are crucial. And if renewable energy technologies are to be continually expanded, its costs would be lowered. Technology cost reduction can be realized through the active collaboration of all stakeholders on local, regional, and global level.

Status of renewable energy in Korea

Because of rapid economic growth accelerated by the heavy and chemical industries, Korea’s energy consumption has increased rapidly since the mid-1970s. Total primary energy consumption (TPES), which stood at 43.9 million tons of oil equivalent (toe) in 1980, increased more than sixfold to 275.7 million toe in 2011. Thus, Korea became the 10th largest energy consuming country in the world. Energy consumption per capita in Korea also increased rapidly from 1.1 toe in 1980 to 5.1 toe in 2011. But Korea energy resources are limited to low-quality anthracite with small amount, which accounted for less than 1 percent of total primary energy supply. With poor domestic energy resources, Korea has to import almost all the energy required. The dependency on imported energy was 96.4 percent in 2011, and the cost of energy import amounted to US$ 1,725 billion, which accounted for 32.9 percent of total inbound shipments.

Korea’s oil demand has been growing rapidly since 1970s, except during the two oil crises in 1973 and 1979. Coal demand also has been increasing annually at an average rate of 5.2 percent for the past 30 years, due to the large amount of industrial use including power generation. But the main use of domestic anthracite has been shifted dramatically from residential sector to industrial sector. Natural gas has been imported from 1986 in the form of LNG, and it accounted for 17% of the primary energy consumption in 2011.

Energy conservation and efficiency policies for reducing energy consumption aim at all components of energy system ranging from primary energy production to end-use. In public procurement, the government gives preference to commodities produced using clean energy technology. Despite nationwide efforts by the government to encourage energy conservation and energy efficiency, increasing demand of energy is expected to persist in the future due to the rapid growth of national economy.

Figure 1.1 Energy consumption in Korea, KEMCO (2013)

At the end of 2012, the amount of new and renewable energy (NRE) supply was 8,851 thousand toe, which comprises 3.18 percent of the total primary energy consumption, 278,698 thousand toe. Of the total supply of NRE, waste utilization makes up 67.7 percent, followed by hydro power at 9.2 percent, and other types of renewable energy at 23.1 percent. NRE power generation also has increased rapidly, photovoltaic (PV) and wind power in particular. With regard to PV, power generation has increased nearly 30 times, from 31,022 Mwh in 2006 to 917,198 Mwh in 2011, whereas for wind, it increased from 238,911 Mwh to 862,884 Mwh. Fuel cell appeared as an electricity source in 2006, and its output in 2010 was almost 44 times higher than that of 2006, reaching 294,621 Mwh. Total NRE power generation accounted for 17,345 GWh, which is about 1.24% of total 501,527 Gwh of electricity generated in 2011.

According to the statistics of the OECD, the annual average growth rate of renewable energy at 6.8% in Korea was 14th among OECD countries during the 2008–2011, but in 2011, the penetration rate of 1.6% was ranked the lowest among the OECD countries. The average of technical standard is 86.2% compared to European countries; in addition, it is about 10% lower than Japan and about 5% higher than China. It must invigorate the system export-oriented business model to overcome the gap between these technologies and price competitiveness and weakness of domestic foundation market. Especially, in order to improve the market share of renewable energy, it must be performed not only through strengthening of price competitiveness and technological development, but also implementation of new big projects such as the Super Grid in Northeast Asia for the expansion of application areas and development of new utilization technologies.

The third basic plan for NRE technology development and deployment established in December 2008, which handles Korea’s medium-long term target for NRE development and deployment, provides action plans and basic strategies. It aims at facilitating the NRE industries into a new growth engine for the Korean economy.

The background of basic plan is as follows:

• 1) NRE is classified as 11 fields of new energy technologies and renewable energy resources such as hydrogen, fuel cell, clean coal, PV, wind, solar-thermal, bio-energy, geothermal, waste and hydro, and suggests supply goals with concrete standards to meet international trends and domestic goals.
• 2) The fundamental direction of the plan is to classify renewable energy sources into deployment-oriented groups: wind, bio-energy, waste, and geothermal.
• 3) R&D-oriented group includes PV, hydrogen, and fuel cell.
• 4) Responding to the climate change and exhaustion of fossil fuels.

According to the business-as-usual (BAU) scenario of the basic plan, the NRE share of primary energy supply will account for 3.6% in 2015, 4.2% in 2020, and 5.7% in 2030, and by the target scenario, the NRE share of primary energy supply will account for 4.3% in 2015, 6.1% in 2020, and 11% in 2030.

Achievement of renewable energy in each area from 2007 to 2011 has increased sharply. The number of manufacturing companies in the NRE industries in Korea has increased from 100 in 2007 to 224 in 2011. It means that the increase was 224% with an annual growth rate of 45%.

The number of employees in the NRE industries has increased from 3,691 in 2007 to 17,161 in 2011, that is, 4.6 times with the annual growth rate of 92%. As PV and wind power industries are expected to become a core growth engine in the future, the effect on employment will also be significant in these fields.

Figure 1.2 Achievement of NRE in Korea, Nam (2013)

The sales of the NRE industries have increased 14.5 times from 2007 to 2011, that is from 1.25 billion US$ to 14.5 billion US$, whereas the export sales have increased 79.5 times, from 0.78 billion US$ in 2007 to 8.42 billion US$ in 2011.

As an effort to improve the condition of energy supply and demand and to promote the development of regional economies by supplying region-specific NRE friendly to the environment, the government has been promoting regional deployment subsidy program designed to support various projects carried out by local governments.

The government provides subsidy for NRE facility users to accelerate NRE deployment. The objective of the subsidy program is to create an initial market for new technologies and systems developed domestically, and to establish and activate the deployment infrastructure for technology and equipment commercialization. These subsidies are classified into two categories: the test-period deployment subsidy and the general deployment subsidy. The government provides the subsidy up to 50% of installation cost for commercialization of these systems.

International cooperation with Northeast Asian countries

Renewable energy is currently considered an effective mean for the climate change protection as well as a major driving force for sustainable economic growth. Recognizing such importance of renewable energy, the Korean government has been involved in a variety of international cooperation activities with international organization and various overseas counterparts.

The government has maintained close relations with its counterpart countries, mainly organizations from China, Japan and Mongolia, to exchange information and develop collaborative programs. In order to promote cooperative programs, joint seminars, business matchmaking, cooperation agreements, and to carry out joint research projects development, intergovernmental collaboration committees are organized. We cooperate with Japan, China, Germany, Spain, Algeria, Italy, Belgium, Chile, UAE, etc.

Many joint seminars have been organized to build the relations with those countries by exchanging current key policies and technological information in various areas such as PV, wind energy, solar-thermal and biomass. With regard to follow-up actions for these partnerships, this would be a great opportunity to identify beneficial areas in the field of NRE.

To construct the Super Grid in the Gobi Desert, international cooperation and the establishment of cooperation network among Northeast Asian countries should be promoted. However, Northeast Asian countries show many differences in the electricity frequency and transmission voltage, as well as power consumption and the capacity of power generation. Because of the poor power status and the size of the economy, it would be required to supply electricity from Gobi Desert to each country by HVDC transmission.

The historical background of international cooperation on renewable energy begins in 1995. Since 1995, Korea–Japan and Korea–China have been holding a joint seminar on renewable energy among Northeast Asian countries. A joint forum on renewable energy was held in Seoul, and the International RE Conference & Exhibition took place in Busan in 2003. Also, AFORE (Asia–Pacific Forum on RE) and GPVC (Global Photovoltaic Conference) were held in 2011. Furthermore, the NE Asia Consortium for Super Grid in the Gobi Desert was launched in 2012. AFORE is a regular event that began in 2008, and the main topics of the forum are renewable energy in terms of policy and strategy, and technology toward low carbon sustainable society.

Symposium on Super Grid was held in 2012. Korea, China, Japan and Mongolia discussed to establish a consortium for Super Grid in Northeast Asia and signed agreements at this symposium.

Figure 1.3 Concept of super grid in Northeast Asia, Song (2012)

During the international joint workshop on Super Grid, a consortium and a working group were formed, with representatives from each of the four countries in March 2013, and ADB financial support proposal was completed at roundtable discussion for Asian Super Grid held in Seoul in May 2013.

The consortium will have a steering committee consisted of delegates from member countries, and a working group will be consisted of representative experts for each technical area from member countries and relevant international institutions.

For the promotion of Super Grid, Korea is running a demonstration test through operating supervisory control system with IT technology. China constructed Super Grid on the basis of demonstration experiences of large-scale PV, wind farm, HVDC, etc., whereas Japan developed a proposal of business model based on mega solar project including Asia Super Grid Plan after Fukushima nuclear disaster. Mongolia established monitoring centers at the Super Grid planned area to measure and collect weather data.

The main concept of Super Grid is related electricity transmission system, based on HVDC, designed to facilitate large-scale sustainable power generation in desert area for transmission to the center area of consumption. The participating countries are Korea, China, Japan and Mongolia.

The core technologies of Super Grid are (1) large scale RE power generation in the Gobi Desert; (2) IT, WAMS, ESS, HVDC; and (3) electricity transmission. Expected effects of Super Grid through the international cooperation in the Northeast Asian countries are technical benefits, economic benefits, social benefits, and environmental benefits. And key challenges could be (1) the consensus among participating countries and system sustainability; (2) developing implementation road map with action plan with member countries; (3) and developing managing rules and establishing organizations needed.

The VLS-PV systems should play an important role, as well as wind farms for clean and safe power generation. At present, a practical project for the “Super Grid in the Gobi Desert” has been proposed to raise funds for a feasibility study, which will carry out site selection, analysis of weather and electrical condition, and basic design for demonstration site in the next stage.

Conclusion

In the near future, renewable energy should become an economically viable option to meet the electricity needs of communities in remote or mountainous regions around the world where conventional power plants cannot be built. The rate of deployment of renewable energy is greatly influenced by the perception of general public and utilities, local, national and international policies, as well as the availability of suitable standards and codes to govern it.

In long-term period, with a solid strategy for building of the Super Grid in desert area, further expansion of large-scale renewable power generation can satisfy the increasing energy demand of the Northeast Asia in a sustainable way. In addition, diffusion of the various kinds of high-tech knowledge and experience will be transferred to local renewable energy institutes, utilities, and energy companies to keep track of worldwide technology developments, technology exchange between universities, and scientific institutes in Northeast Asian countries.

To realize our dream, we should try to build consensus with convergence, integration, and harmonization based on neighborhood.

References

KEMCO (2013), Statistics of New & Renewable Energy, Yearbook of Korea Energy Management Corporation (KEMCO), December 2013.

Nam, G. (2013), Achievement of New & Renewable Energy in Korea, 4th International Asia Pacific Forum on Renewable Energy, Yeasu, Korea, November 2013.

Song, J. (2012), Super Grid in NE Asia, International Conference on RE & Grid Integration in NE Asia, Ulaanbaatar, Mongolia, November 2012.

2
Renewable energy and regional economies

Cases in Hokkaido, Japan

Fumikazu Yoshida and Haruyo Yoshida

Renewable energy and regional economies

Characteristics of renewable energy

The power derived from renewable sources of energy enhances rates of energy self-sufficiency and helps to combat global warming through the development and utilization of such local resources of natural energy as wind power, solar power, biomass, geothermal energy and small-scale hydropower. Its outstanding basic characteristics include the elimination of the need for fossil fuels, the absence of ...