South Korea Microgrid Industry to Grow at a CAGR 27.1% from 2022 to 2027
MarketsandMarkets Research Pvt. Ltd.
5 min read
MarketsandMarkets Research Pvt. Ltd.
Chicago, May 09, 2023 (GLOBE NEWSWIRE) -- According to a research report South Korea Microgrid Marketby Connectivity (Grid-connected, Off-grid), Offering (Power Generators, Controllers, Energy Storage, Software, Services), End User (Commercial & Industrial, Military, Utilities), Type, Power Rating & Geography - Global Forecast to 2027", published by MarketsandMarkets, South Korea Microgrid Industry to Grow at a CAGR 27.1% from 2022 to 2027
South Korea to record highest CAGR of 27.1 % in microgrid market during forecast period
The growth of the microgrid market in this country can be attributed to factors such as increasing investments in the use of clean energy sources for electricity generation, growing government support for adopting renewable energy, and a rising number of microgrid projects.
The South Korean government has been promoting the development of microgrids through various policies and initiatives, such as the "Renewable Energy 2030 Plan" and the "Smart Grid Roadmap", which aim to encourage the integration of renewable energy sources, enhance energy efficiency, and improve the resilience and security of the energy system. In 2021, South Korea announced a USD 43.2 billion (KRW 48.5 trillion) project to develop an 8.2 GW wind complex offshore the Sinan County, South Jeolla Province. The project is said to be the world’s largest and forms a part of the country’s efforts to support a green recovery. The South Korean Government also announced a Green New Deal on 14 July 2020, worth ~USD 94.5 billion (KRW 114 trillion) to drive the country’s post-COVID economic recovery. The plan includes remodeling public buildings to boost energy efficiency, creating urban forests, establishing a foundation for new and renewable energy, and creating low-carbon energy industrial complexes to reduce reliance on fossil fuels.
According to government plans, up to 63.8 GW of renewable energy will be installed by 2030, generating 20% of national generation and reducing carbon emissions by 37%, in order to meet the South Korea's commitment to the 2015 Paris climate change agreement. The government provides subsidies for renewable energy sources such as solar, wind, and bioenergy, and power producers are required to use renewable energy credits (RECs) in their generation portfolios. The government's initiative to encourage the growth of the renewable energy supply has resulted in a sharp rise in the number of microgrids of the PV + energy storage systems (ESS) variety. Because of this, utility companies must make significant investments not only in the construction of new transmission and distribution lines but also in the expansion of already-existing infrastructure like substations, transmission towers, main transformers, etc. Access to grids for solar systems of less than 1,000 kW was granted in 2019 by the government, which is responsible for implementing the Paris Climate Change Agreement.
In addition, South Korea is heavily reliant on energy imports, which makes the country vulnerable to supply disruptions and price volatility. Microgrid industry can provide a more resilient and secure source of energy, reducing the country's reliance on imported energy. Since 2009, Korea's microgrid has been expanding to support demand response, peak reduction, and output stabilization for renewable energy sources like solar, wind, and geothermal energy. Across the country, 1,267 microgrids and energy storage systems (ESS) are in operation with a total storage capacity of 4.3 GWh. Also, various new microgrid companies are entering the South Korean market. As microgrids become more common, fossil fuel power plants and long-distance transmission and distribution networks could be replaced, which would reduce utilities' investment and contribute to global warming prevention.
Moreover, South Korea has some of the highest electricity prices in the world, which is driving demand for more efficient and cost-effective energy solutions. Microgrids can provide a more resilient and secure source of energy, which can help to reduce the country's reliance on expensive imported energy sources. The country has undergone rapid industrialization in recent years, which has led to an increase in energy demand. Microgrids can provide a more flexible and reliable source of energy, which is essential for supporting industrial processes and ensuring the stability of the energy system. South Korea is also focusing on increasing the adoption of renewable energy sources, such as solar and wind power. Microgrids can help to integrate these sources into the grid and provide a more reliable source of energy.
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