Korea Renewable Energy Bids May Shift From Price Competition
Industry experts and developers are urging the Korean government to design a new renewable energy bidding system that secures effective competition rather than focusing solely on low winning bids, especially as the nation transitions from the Renewable Portfolio Standard (RPS) to a long-term fixed-price contract market.
Our take
Will Korea's post-RPS contract market for renewables reward the lowest bids or bankable projects?
Korea's post-RPS contract market will reward bankable renewable projects only if ceiling prices track current costs and KEPCO's standard contract is released early, and the market's implementing rules are still in draft.
A two-way contract for difference replaces REC price exposure with a fixed long-term settlement, the revenue lenders look for. What decides is whether the cost committee sets ceilings at current capital and financing costs, since a ceiling set too low left a UK auction round with no bidders.
For investors — Solar and wind developers should model projects against the published ceiling and the formula behind it, and treat the community participation premium, discussed as a fixed amount per kWh, as a separate revenue line.
Lenders should treat KEPCO's standard contract as the document that sets bankability and expect financing for already awarded projects to wait until its terms are public.
Watch: Industry calls for a bidding system that prioritizes effective competition and stability over low winning bids.
Weekly digest
What changed in Korea's power market this week — one email, every week.
Email only, used solely to send this digest (delivered via Resend). Unconfirmed sign-ups are deleted after 30 days. Free.