ENG
What is PPA?
(Power Purchase Agreement)
It is called a power supply contract or power purchase contract and refers to a long-term power purchase contract between a power producer (power generation business) and a power consumer (demand company).
What is Direct PPA?
It means signing a Power Purchase Agreement (PPA) between a renewable energy power generation business, a renewable energy electricity supply business, and a power consumer (demand company). The power consumer (demand company) purchases renewable energy power directly without going through the existing KEPCO. This is how RE100 is implemented.
Direct power transaction (Direct PPA) structure
- Renewable energy power generation companies produce electricity and sell it to renewable energy supply companies without going through the electricity market
- Renewable energy supply business sells electricity purchased from power generation business to electricity consumers (actual users)
- At this time, the remaining power is sold to the electricity market, and the insufficient power is purchased from the electricity market or sales operators.
*Effective from September 2022 to promote the use of renewable energy by domestic companies participating in the RE100 campaign
Before that there was no way for users to selectively purchase electricity directly.
In the past, unless directly invested in the renewable energy power generation business, it was mainly traded through intermediaries such as Korea Electric Power Corporation.
However, it is currently possible to enter into a direct contract between producers and consumers through Direct PPA.
This will make it easier for users of electricity above 300 kW to utilize renewable energy.
Summary
RE100 Summary
The RE100(Renewable Electricity 100%) campaign is a voluntary global renewable energy initiative by companies to use 100% of the power required by companies as electricity generated through eco-friendly renewable energy sources such as ‘Photovoltaic energy and wind power.’ The RE100 campaign was first launched at New York Climate Week in 2014 by a joint effort between international non-profit environmental organizations The Climate Group and CDP, and began as an advocacy campaign to ensure the success of the 2014 Paris Agreement.
Global RE100 Summary
Concept
A voluntary campaign led by the international non-profit organization ‘The Climate Group’ and in cooperation with the CDP Committee, an international organization, in which companies declare that they will use 100% of the electricity they use as renewable energy. (‘14Y~)
- *RE100 : Abbreviation for Renewable Electricity 100%
- *Carbon Disclosure Project(CDP) : A global project that conducts research and analysis by requesting and collecting corporate management strategies to combat climate change from major listed companies around the world.
Target
Companies that consume more than 100GWh (0.1TWh) of electricity per year
Goal
Recommendation to set implementation goals of 60% by 2030, 90% by 2040, and 100% by 2050
Participation status
More than 392 companies including Google, Apple, BMW, etc. participated (as of December 2022)
Status of major companies implementing RE100
K-RE100 Summary
Domestic electricity consumers use renewable energy electricity, receive a [Renewable Energy Use Confirmation], and use it for RE100 implementation, marketing, etc.
Applicant
- Industrial and general electricity consumers
- Recommended setting a goal of 100% implementation by 2050
- Intermediate goals are set voluntarily
- Electricity consumers who have entered into separate contracts with industrial and general electricity consumers are also eligible (e.g., tenant companies).
- When participating in the global RE100 campaign, the intermediate goal is 60% by 2030 and 90% by 2040.
Overview of implementation measures and procedures for confirming the use of renewable energy
K-RE100 implementation means
1. Green premium
Electricity consumers purchase renewable energy electricity by paying a green premium separate from the existing electricity rate to KEPCO.
- KEPCO issues a [Renewable Energy Use Confirmation] quarterly for electricity purchased by electricity consumers.
2. Purchasing REC
Electricity consumers purchase renewable energy RECs that are not used to fulfill RPS obligations through the REC trading platform opened by the Korea Energy Agency
- Electricity consumers purchase RECs and submit the purchased RECs to the RE100 management system to issue a [Renewable Energy Use Confirmation]
3. Third-party PPA
Purchase electricity by signing a Power Purchase Agreement (PPA) between electricity consumers and renewable energy power generation companies through KEPCO brokerage.
- Insufficient electricity will be purchased from KEPCO according to the existing rate system, and electricity users will submit renewable energy usage records to the Korea Energy Agency and receive a [Renewable Energy Use Confirmation] from the Korea Energy Agency.
4. Direct PPA
Purchase electricity by signing a Power Purchase Agreement (PPA) between electricity consumers and renewable energy generators without going through KEPCO.
- Insufficient electricity will be purchased from KEPCO according to the existing rate system, and electricity users will submit renewable energy usage records to the Korea Energy Agency and receive a [Renewable Energy Use Confirmation] from the Korea Energy Agency to implement RE100. In some cases, selling electricity through the power exchange is also possible.
5. Self-generation
Electricity consumers install their own renewable energy facilities and use them directly.
- It is similar to an on-site PPA, but in a way that the company directly assumes all responsibility for the installation and operation of renewable energy generation facilities. Use renewable energy electricity and use the issued [Renewable Energy Use Confirmation] to implement RE100 and greenhouse gas reduction.
6. Equity participation
Electricity consumers invest a certain amount of equity in a renewable energy power generation business and enter into a separate third-party PPA or REC contract with the relevant power generation company.
- Electricity consumers purchase electricity or REC and submit it to the RE100 management system to use the issued [Renewable Energy Use Confirmation] for RE100 and greenhouse gas reduction implementation.
