136-185 won/kWh
PV without cost in Korea PPA Off take price range
39MW
PPA capacity put into operation among 1GW installed capacity signed by South Korea since 2022
46%
Industry since South Korea introduced enterprise PPA Electricity price Increase of
(Source: WeChat official account "Bloomberg New Energy Finance" Author: BNEF)
Since South Korea signed the first enterprise power purchase agreement (PPA) in 2022, the announced PV contracts have exceeded 1GW. However, as of May 2024, only 39MW is in operation. Bloomberg New Energy Finance cooperated with Climate Group to conduct the first corporate PPA survey in South Korea. This report discusses the main findings of the survey, including the off take prices of photovoltaic, onshore and offshore wind power, and highlights the expected price gap between buyers and sellers.
According to the research of Bloomberg New Energy Finance, the signed, provided or sought enterprise PPA price is:
PV 136-185 won (10-13 cents)/kWh, onshore wind 180-210 won/kWh. The PV contracts negotiated between 2021 and 2023 are 23% cheaper on average. In the case of limited renewable energy supply, the demand for clean power procurement continues to grow, which means that the average price of photovoltaic contracts may rise by 12% next year.
Expected gap:
At present, renewable energy developers are willing to supply clean power to enterprise buyers at the prices of 168-185 won/kWh (photovoltaic) and 190-210 won/kWh (onshore wind power), while buyers hope to take off at a lower price of 5% - 19%.
PV is the most popular source of PPA energy:
In view of the high price and long delivery cycle of wind power projects in South Korea, buyers who aim to decarbonize by 2030 will consider PV as the most feasible option.
Offtake costs of renewable energy may depress industrial electricity prices:
Since the first introduction of enterprise PPA in 2022, the industrial electricity price has increased by 46%. Today, the lower limit of the off take price range of photovoltaic without cost is lower than the industrial electricity price.
PPA is cheaper than Renewable Energy Certificate (REC):
With the rise of industrial electricity prices, the purchase of clean electricity through REC (one of the most popular options last year) is now more expensive than the total price of PPA.