Korea plans major overhaul of DER market, grid, and supply chain
The Korean government's K-GX strategy plans a major overhaul of its energy market, grid, and supply chain, aiming to expand renewable energy capacity from approximately 37 GW to 100 GW by 2030. This includes abolishing the Renewable Energy Certificate (REC) and spot markets from 2027 in favor of competitive fixed-price bidding and introducing regional electricity tariffs.
Our take
How will Korea's K-GX strategy reshape the renewable energy market and investment landscape?
This strategy shifts the Korean DER market towards a cost-competitive, grid-integrated model, where developers will face direct price competition through fixed-price bidding from 2027, rather than relying on REC and spot market revenues, while consumers in high-cost regions may see differentiated tariffs.
The abolition of the REC and spot markets and the transition to competitive fixed-price bidding are designed to reduce overall generation costs and address increasing settlement expenses. Simultaneously, the introduction of regional electricity tariffs, enabled by provisions like Distributed Energy Act Article 45, aims to reflect actual transmission and distribution costs, influencing investment decisions by penalizing generation in grid-constrained areas and incentivizing it in grid-available regions.
What the source says
- The government will fully restructure the renewable energy supply system after 15 years, abolishing the REC and spot markets and unifying the system to competitive fixed-price bidding from 2027.
- The K-GX strategy targets 87 GW of solar and 9 GW of wind capacity by 2030.
- GW-scale solar projects will be developed in grid-available regions, utilizing policy-supported sites like factory roofs, agri-voltaics, and floating solar.
- Large-scale planned sites and permitting support will expand wind power, alongside infrastructure like dedicated ports and installation vessels for offshore wind.
- The electricity market and tariff system will be reformed, starting with the introduction of electricity forecasts in Jeju Island to reflect price signals during renewable energy oversupply, followed by phased market restructuring to demand and price bidding.
- An annual ESS central contract market will be operated to secure flexibility resources for the grid.
- A special purpose corporation (SPC) will be established in 2026 to promote the Saemangeum-Seohwaseong underwater HVDC demonstration project.
- The 'Korean Kraken' AI model for optimizing distributed resources like renewables, ESS, and V2G is slated for development starting in 2027, with real-world integration demonstrations planned after 2028.
- Doosan Enerbility Doosan Enerbility plans to establish an SMR foundry in Changwon to produce over 20 SMR units annually by 2030.
- The government aims to introduce the first i-SMR unit by 2035 and build an SMR production base.
- The strategy includes developing next-generation solar technologies like tandem cells and perovskites, and securing 20MW-class ultra-large turbines and floating offshore wind technology.
- A sodium battery-based ESS pilot line and demonstration project are being pursued in Ochang and Jeju, respectively, to secure a new supply chain beyond China's LFP-centric ESS market.
For investors — Investors and operators in the Korean DER market must adapt to a more competitive, cost-sensitive environment, prioritizing projects with lower generation costs and strong grid integration capabilities. Opportunities will emerge in developing flexible resources for the ESS central contract market and in regions with favorable grid conditions under the new regional tariff system.
Watch: Monitoring the establishment of the Saemangeum-Seohwaseong HVDC SPC in 2026 and the commencement of 'Korean Kraken' AI model development in 2027.
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