Jeju Smart Grid Complex Draws Global Attention

The Korea Smart Grid Week will take place on the island at the same time as the G20 Seoul Summit

The Korean government is devoting itself to fostering the smart grid industry as a growth engine under the low-carbon, green-growth paradigm and is getting a jumpstart in the global market. The following are excerpts of an interview between NewsWorld and Kim Jung-gwan, deputy minister for energy & resources at the Ministry of Knowledge Economy, who touched on the nation’s policies to promote the domestic smart grid industry and make inroads into global markets.
Question: Will you tell our readers about your views on the reason why the Korean government attaches priority to the smart grid?
Answer: Korea has world-class power and communications infrastructure and the world’s top-class companies in the secondary battery, automobile and home appliances industries and other industries related to the smart grid, so the nation has strengths with which to pursue the smart grid. The nation ranked second with a 35.3 percent share of the global secondary battery market in the first quarter of this year, fifth with a 5.7 percent share in the global automobile market and first with a 50 percent share in the global digital TV market.
The introduction of the smart grid is aimed at tackling such global tasks as energy crises, greenhouse gas emissions reduction and explosive energy demand. Demonstration surveys showed that the smart grid system was forecast to reduce electricity consumption of households in foreign countries by 5 to 15 percent and those of Korean counterparts by 5.5 percent to 9.5 percent.
It is an essential infrastructure for expanding new and renewable energy resources and proliferating electric and hybrid cars. Korea plans to cut greenhouse gas emissions by 30 percent of business-as-usual forecasts in 2030, raise the portion of new and renewable energies to 11 percent and supply 2.4 million electric cars.
The implementation of the smart grid, combining the IT and electricity industries, is to improve consumers’ convenience by introducing new service innovations in the electricity field. It is also a significant task to transform the electricity industry into a new growth engine by fostering smart grid firms with a competitive edge in the global market.
Q: This past January, the government established a national roadmap for the smart grid. The roadmap is expected to serve as a compass for implementing projects under mid- and long-term perspectives. Will you elaborate on goals and major plans to be carried out in the years to come?
A: The government set a vision to build a foundation for low-carbon, green growth through the construction of the smart grid with the goal of completing a nationwide smart grid network by 2020 as part of its strategies to build leading smart grid centers and spread the smart grid in pilot cities and metropolitan cites. Toward this end, stage-by-stage technology development and business models in five fields ― intelligent power network, consumer, transportation, new and renewable energy, and service ― have been worked out.
We’re making flat-out efforts to build a nationwide smart grid network as a signature brand of the nation’s green-growth paradigm. We expect the successful practice of the ongoing Jeju Smart Grid Complex to lay a solid foundation for building a nationwide smart grid network, advancing the commercializing of the smart grid and exploring smart grid business models. In particular, the Korea Smart Grid Week, which will take place from Nov. 8-14 at the complex, is designed to raise consumers’ understanding of the smart grid and build a global cooperation regime.
Q: The government is drafting a law designed to spur the systematic promotion of the smart grid. Please tell us about the contents of the planned law and legislation schedule.
A: The government is striving to create a legal and institutional foundation to stabilize the establishment of infrastructure combining electricity and IT industries by legislating the Act on the Construction of the Intelligent Power Network and Facilitation of Use to provide institutional support to companies wanting to explore business models. The projected law calls for laying a legal foundation for the establishment of national mid- and long-term plans, the provision of government budgetary support and guidelines for using information on energy use, which is a matter of privacy.
This past March, we launched preparations to pass the projected law within this year. A drafted version of the law is now being sent to the Ministry of Government Legislation for review after finishing a public hearing and inter-ministry consultations before it is submitted to the cabinet and the parliament in late October.
Q: The Korean government is striving to build a foundation to make inroads into the global smart grid market. How do you make an assessment of the trends of the global smart grid market and prospects of the nation’s advance into the global market?
A: Nations are scrambling to purse the promotion of the smart grid industry as a means of coping with climate change and greenhouse gas emissions as an infrastructure for low-carbon, green growth. In October 2009, the U.S. government released a “Smart Grid Stimulus Package” to invest $3.4 billion into establishing a smart grid network as part of the so-called Green New Deal to overcome the global financial crisis. The European Union is implementing a smart grid strategy with the goal of tackling climate change pacts and raising the portion of new and renewable energy to 20 percent by 2020 and improving energy efficiency by 20 percent. The global smart grid market is growing bigger with an increasing number of countries implementing smart grid projects, so Korean smart grid firms are expected to have more opportunities to advance into foreign markets.
The nation has world-class power and telecommunications infrastructure and global top corporate players in the smart grid field. Korea Electric Power Corp. (KEPCO) has continued to invest 4.7 trillion won per year to make power transmission and distribution networks intelligent in order to improve electricity quality and efficiency. KEPCO has a world-class track record: registering the power and transmission and distribution rate at 4.0 percent and logging the blackout time at just under 16 minutes per house. Korea also has world-class battery, automobile and electric appliance manufacturers.
Korea is striving to help Korean companies secure a foothold in the U.S. market by forging cooperative ties with the state of Illinois. In particular, Korean firms are expected to make inroads into foreign markets as the nation plays a leading role in the establishment of the International Smart Grid Action Network (ISGAN). The ISGAN will hold a meeting during the Korea Smart Grid Week, which will coincide with the period of the G20 Seoul Summit slated for Nov. 11-12 in Seoul.
Q: The Jeju Smart Grid Project is drawing global attention. What’s the significance of the project and what support does the government provide to the complex?
A: The Jeju Smart Grid Complex is serving as an incubator to explore innovative business models based on the utilization of large-scale convergence technologies. Companies have been participating in the project designed to provide them with opportunities to explore smart grid business models with a higher than expected show of interest. Originally, 120 billion won ― 64.5 billion won from government coffers and 57.5 billion won from the private sector ― were to be poured into the project, but the private sector’s intensive interest and investments led to funding 239.5 billion won ― 68.5 billion won from the government and 171 billion won from the private sector. Initial options considered e-mail information services, but in reality, the construction of a broadband network has led to the exploration of diverse business models, including IPTV, Internet video phone, user created contents (UCC) and e-commerce. The Jeju project is expected to expedite the exploration of innovative business models and help companies make inroad into foreign markets by capitalizing on the experiences and expertise they have accumulated during the execution of the project.
The government is striving to streamline systems for promoting optimum convergence among industries and provide support amid the private sector’s enthusiastic participation. To this end, the government seeks to enact the Act on the Construction of the Intelligent Power Network and Facilitation of Use in order to take the lead in establishing smart grid standard regimes and creating global standards and get a jump-start in global markets. It will also provide support to Korean companies wanting to advance into foreign markets with business models arising from the Jeju smart grid project by agreeing to collaborate in joint smart grid projects with Illinois. nw

Kim Jung-gwan, deputy minister for energy & resources at the Ministry of Knowledge Economy