From FIT to RPS under the Low-Carbon Green Growth Initiative

The Korean government replaced its FIT program with a RPS program in 2012 due to its financial burden. This paper aims to analyze the shift from FIT to RPS and then evaluate the current RPS program that has been a year since its implementation. Additionally, this paper provides some suggestions to overcome problems appeared in the current RPS program. This paper finds the followings as a result of the analysis. First, the current RPS program is designed for reducing the government's financial burden. Furthermore, its solar carve-out provision and flexible mechanism of the program support PV expansion and reduce the burden of targeted generators. Second, the current RPS program has shortcomings and this paper provides the following suggestions in order to expand new and renewable energy in Korea. First, the multipliers of the current RPS program need to be readjusted for new and renewable energy sources that can create environmental and social problems. Additionally, the multiplier of the solar carve-out needs to be readjusted for expanding PV for areas that would be no harm done to the quality of the land. Second, the RPS program needs to be harmonized with other environmentally related laws. Third, in order to prevent legal and institutional conflicts, a mechanism or an institution to solve these conflicts can be created. Fourth, the current RPS program needs to diversify renewable energy such as geothermal energy instead of providing financial investment for fossil fuel based energy sources such as IGCC. Fifth, the current RPS program needs to be harmoniously implemented with ETS in order to reduce burdens for generators who will be regulated under two measures. Sixth, RPS and FIT should be considered together in order to expand new and renewable energy.