Korean FIT(Solar power generation)
Korean FIT(Solar power generation)
What is Korean FIT?
The Korean FIT was introduced to create stable profits for small-scale solar power generation businesses and improve electricity sales procedures'convenience. It will be promoted for a limited time for five years. (implemented from July 12, 2018)
It is a system that allows you to trade with six obliged suppliers (KHNP, Southeast Power, Midwest Power, Western Power, Southern Power, East-West Power) for 20 years at a fixed price calculated as the highest price among the average price of competitive bids for fixed-price contracts in the previous year.
KOREAN FIT ISITITUTION
Korean FIT system
Korean power generation
difference support system
What is Korean FIT?
STEP01
Announcement
Center
- Participation qualification
- Contract unit price
- Contract method
STEP02
Application
Business operator (year-round)
- Check qualification conditions
STEP03
Register facility
Center (within 1 month after receipt)
- Receive and review equipment
- Issue receipt of equipment
STEP04
Contract
6 obliged power suppliers ↔ Business operator
- Center relays contract
STEP05
Settlement
6 obliged power suppliers ↔ Business
- SMP (KEPCO, Power Exchange) and
REC (6 power suppliers)
Qualification for application
- Solar power generation companies with less than 30kW facility capacity
- Solar power generation business operator with a facility capacity less than 100kW, farmers according to the Agriculture-Rural and Food Industry Framework Act', fishermen under the 'Fisheries-Fishing Village Development Fundamental Act,' a person who has obtained a business license under the 'Livestock Act'
Solar power plants less than 100kW: Farmers, livestock farmers, fishers, and cooperatives can participate by submitting documents proving their qualifications.
※ Cooperative: Refers to a cooperative according to the 'Basic Act of Cooperatives' or a cooperative composed of farmers, livestock farmers, and fishermen - Farming associations, etc. promote solar power generation projects with a facility capacity of less than 100kW by combining members of the above 2 members.
- Among the associations according to the "Basic Act of Cooperatives," those who are promoting photovoltaic power generation projects with a facility capacity of less than 100kW.
- A person who connects and installs an ESS facility to a photovoltaic power generation facility that meets one or more of the above requirements 1-4 (however, it is not possible to apply for an ESS alone facility)
How to participate
- New Business Operators: Select 'Korean Feed in Tariff (FIT)' when applying for Renewable energy Portfolio Standard (“RPS”) facility confirmation after the power plant has been completed.
- Existing businesses: Temporary permission (until the end of 2019), apply for participation in the ' Korean Feed in Tariff (FIT)' in the RPS system.
Contract procedure
- After applying for Korean FIT,' the Korea Energy Agency reviews the result (equipment certificate) to the business operator. Within 1 month after the notification, a fixed price contract will be signed with six obliged power suppliers*.
* 6 obliged power suppliers: Korea Hydro & Nuclear Power, Korea South-East Power, Korea Midland Power, Korea Western Power, Korea Southern Power, Korea East-West Power
Selling Price
- The higher of the average price of successful bids less than 100kW for each half of the previous year's fixed-price contract competitive bidding. Example) The purchase price (SMP+REC) in 2020 is KRW 173,981/MWh*, and it can be sold for 20 years at the same price.
- As Korean FIT signs contracts with six obliged power suppliers for all contracts applied at a fixed price calculated without separate bidding competition, stable profitability and procedural convenience for small-scale solar power generation companies are expected to improve.
Comparison of fixed price bidding contract and Korean FIT system
| Comparison of fixed price bidding contract and Korean FIT system |
Fixed price bidding contract | Korean FIT |
|---|---|---|
|
Subjects to participate |
No limit |
Less than 30kW: No limit, Less than 100Kw: Farmers, livestock farmers, fishermen and cooperatives |
|
Contract period |
20 years |
20 years |
|
Bid Status |
Bidding Participation (Competition Method) |
No Separate Bid |
|
Fixed Price (SMP+1PEC) |
151,439 Won (20 First Half Bidding Average Price) |
173,981 Won (20 Korean FIT Purchase Price) |
|
Purchase Volume |
Obliged Yearly supply capacity |
No limit |
|
Application period |
Twice a year |
All year round |