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South Korea Renewables Report Q2 2016

South Korea Renewables Report Q2 2016

BMI View: South Korea will remain dependent on coal and nuclear for its power generation over our 10- year forecast period, despite small gains made with its renewable energy expansion. The prevalence of cheaper fuels will undermine investment into the renewables sector, but we note that the project pipeline for wind power has strengthened over the last six months. We expect 3.7GW of installed wind capacity by 2025.

Latest Updates And Structural Trends

South Korea's 2015 non-hydro renewables capacity increased by an estimated 12.4% to 2,727MW, which represented just 2.6% in the country's total power mix. We forecast the non-hydro renewbles capacity to continue expanding at an average of 10.4% per annum over the next decade, lifting the total capacity figure to 7,300MW.

We hold our view that the wind sector will overperform against the other industry segments, growing by an average of 18.9% per annum between 2016 and 2025. This will turn the wind sector into the largest contributor in terms of non-hydro renewables generation and capacity.

Overall, the non-hydro renewables contribution to South Korea's power mix will remain limited. The industry is expected to contribute 5.1% to the country's total power capacity and account for just 1.7% of the total generation in 2025. Our current forecast faces a further downside risk due to the availability of cheaper power sources, most notably coal and nuclear, which continue hindering investment in to the renewable industry.

In early 2016, South Korean multinational electronics company LG Electronics signed a memorandum of understanding with Gumi to invest KRW527.2bn (USD435mn) expanding its solar cell manufacturing plant in the city. The project will increase the company's solar panel production capacity from 1GW to 1.8GW by 2018 and to 3GW by 2020.

According to reports in late November 2015, South Korean chemical company LG Chem signed an agreement with local power producer GS E&R to develop the world's largest wind energy storage project in South Korea. Under the deal, LG Chem will install a 50MWh storage system at a wind farm in Yeongyang, North Gyeongsang province.


BMI Industry View
Table: Renewables Headline Forecasts (South Korea 2015-2021)
SWOT
Industry Forecast
South Korea Renewables Forecast Scenario
Latest Updates
Structural Trends
Table: South Korea Non-Hydro Renewables Generation Forecasts, 2014-2019
Table: Total Electricity Generation Data And Forecasts (South Korea 2020-2025)
Table: Electricity Generating Capacity Data And Forecasts (South Korea 2014-2019)
Table: Electricity Generating Capacity Data And Forecasts (South Korea 2020-2025)
South Korea Renewables Projects Database
Table: Top 10 Renewables Projects By Capacity (MW)
Industry Risk Reward Index
South Korea Renewables Risk/Reward Index
Rewards
Risks
Market Overview
Sustainable Energy Policy and Infrastructure
Targets
Table: Supply Targets For New And Renewable Energies
Subsidies
Infrastructure
Competitive Landscape
Korea District Heating Corporation (KDHC)
Korea Hydro & Nuclear Power (KHNP)
Glossary
Table: Glossary Of Terms
Methodology
Methodology And Sources
Industry Forecast Methodology
Sources
Risk/Reward Index Methodology
Table: Renewables Risk/Reward Index Indicators
Table: Weighting Indicators

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