Gov't to Subsidize Gas Cooling System Installation

5 billion won set aside for the project designed to mitigate electricity peak loads

The government will soon embark on a project to offer subsidies for installing gas cooling systems in a bid to reduce electricity peak load. The Ministry of Knowledge Economy (MKE) held a policy explanation session at the AT Center in Seoul on March 5 in which it announced policies to encourage the installation of gas cooling systems in large-sized buildings and public enterprise structures.
The ministry set aside 5 billion won in the 2010 budget and decided to offer a subsidy equivalent to 15 percent of gas cooling system installation costs. Korea Gas Corp. (KOGAS) will be in charge of the subsidy program and subsidy applications will be accepted at KOGAS's regional headquarters.
The ministry plans to expand the provision of loans for investments into the installation of gas cooling systems and lower gas retail costs for gas cooling systems in order to reduce the financial burden for their installation. The provision of loans will be expanded for laying pipes and internal equipment on top of external equipment, and the financial support rate will be raised from 80 percent to 100 percent. The reduction of gas retail costs is expected to result in lowering consumers' gas charges by more than 10 percent.
KOGAS will build a cooperative system with gas cooling system manufacturers to develop technologies to improve the efficiency of gas cooling systems, revise the standards for certifying high-efficiency equipment and simplify the process for testing gas cooling systems.
The MKE plans to consult with the Ministry of Public Administration and Security and the Ministry of Land, Transport and Maritime Affairs on steps to encourage the installation of gas cooling systems in the course of building and expanding public organization structures as well as the establishment of energy preservation plans for large-sized buildings.
The subsidy project will likely push up gas demand for gas cooling systems by approximately 17 percent compared to last year, and the rise in gas demand will accelerate next year when the subsidy project will be fully in force, said Chang Young-jin, director of gas industry at the MKE.
If gas cooling sees its portion rise 10 percentage points, it would have an effect of saving about 300 billion won annually ― equivalent to the construction of five liquefied natural gas-fired power plants and 3.5 LNG tank units.
During the session, KOGAS signed an MOU on efficiency improvement with gas cooling system makers LS Mtron and Shinsung Engineering Co. The agreement, calling for improving the efficiency of Korean-made devices, would pave the way for differentiating subsidies, one of the government's mid- and long-term tasks, he said.
A gas cooling committee, headed by KOGAS and the Korea City Gas Association, will be formed to coordinate policies related to gas cooling and publicize the proliferation of gas cooling.
The subsidy project is designed to proliferate gas cooling systems to replace system air conditioners with electric heat pumps, thus contributing to the alleviation of peak power loads for heating during winter. Korea's gas cooling systems account for 12.4 percent of power demand, far lower than the 22.6 percent share for Japan.
Despite some strongpoints of gas cooling systems, the supply of gas cooling systems with gas heat pumps now remains sluggish due to the fact that the installation and operation costs of gas cooling systems is more expensive than electric cooling. nw

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