To cope with the continued electricity shortage during peak seasons, the government will strengthen policies for power demand control rather than expanding the power supply capacity by building more power plants.

The Ministry of Trade, Industry and Energy announced on Sunday it would renovate the nation’s electricity management system by applying advanced information communication technology.

The core idea is to adopt technology-based energy management solutions, including the energy storage system, so that companies, the biggest power-consuming group, may generate or save energy during night when electricity fees are low.

The saved energy may be used later during peak hours or sold to the Korea Power Exchange, according to ministry officials.

This is the first energy policy to be announced after a week when electricity demand peaked, raising fears of a possible blackout.

“A fundamental shift of paradigm was needed as stopgap measures such as simple power-saving campaigns are no longer sufficient,” said Energy Minister Yoon Sang-jick.

“These new ICT-based energy management systems will not only achieve an electricity supply and demand balance but also create new investment and a 3.5 billion won ($3.1 billion) market by 2017.”

In order to encourage the use of the energy storage system, the ministry is to offer various financial incentives, in particular, to small-and mid-sized firms that install the system, according to officials.

This is a non-binding measure but may become compulsory, should local industries fail to cooperate, he added.

“The ESS will especially be effective, when combined with the renewable energy markets, such as wind power,” the official explained.

“In order to maximize the effect of the ESS, we will widen the electricity fee gap between light duty hours and peak hours,” the minister said, pledging to restructure the current fee system by October.

To monitor the energy situation in real-time, the government will also encourage the introduction of an energy management system, focusing on high energy-consuming industries and public buildings.

In response to the government’s tech-based energy management calls, some conglomerates like Samsung SDI have recently installed EMS and ESS facilities using their own budgets, with a capacity to reduce 1 megawatt of electricity during peak hours.

“Though details are yet to be discussed, the ministry’s vision of combining ICT with the nation’s power management system was quite timely and appropriate,” said Moon Seung-il, professor of Electrical Engineering at Seoul National University.

Concerns, however, existed on the related budget, as the ministry said it would amount to 100 billion won over the next four years. In addition, the policy has no timeline as it is not binding.

Despite such limits in tech-based power demand control in the corporate sector, the government is likely to stick to power demand control driven-polices rather than power supply expansion plans as it is difficult to adjust a mix of the nation’s energy sources, composed of coal, nuclear power, natural gas and renewable and other sources.

“As an alternative to nuclear energy, which takes one-third of the nation’s power generation, demand for renewable energy sources for more electricity supply is rising, but the shift to renewable is not yet a feasible option for Korea due to low cost efficiency and lack of land for renewable energy generation facilities,” a MOTIE official said.

By Bae Hyun-jung, Seo Jee-yeon
(tellme@heraldcorp.com) (jyseo@heraldcorp.com)