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Policy Assessment and Implications

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Policy Assessment and Implications06



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Title Policy Assessment and Implications
Similar Titles
Material Type Report
Date 2015
Language Korean
File Type Theme
Subject Industry and Technology < Energy
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Abstract

Sub-Theme 4 |  Policy Assessment and Implications





Basic Plans for New and Renewable Energy: According to the Promotional Law of NRE, the Korean government is supposed to establish a national basic plan to promote NREs and to revise every 5 years, reflecting on changes in energy demand and supply as well as energy market and industry. This plan differentiated policy focuses based on the following categories of energy technologies: Core technologies such as solar PVs, solar thermal, fuel-cell and IGCC, technologies such as waste-to-energy, bioenergy, wind power and coal utilization technology, and basic technologies such as small hydro, ocean, hydrogen and geothermal. Up to now, the Korean government has developed and revised three basic plans. The most recent version is the 4th National Basic Plan for NRE Development and Deployment. And now the 5th National Basic Plan for NRE is underway



Major Policies, Policy Tools and Measures: Up to now, the government has developed and implemented various measures to directly support NREs deployment, including a feed-in tariff (FIT), renewable energy portfolio standards (RPS), direct support, tax benefits and R&D funding. Among them, FIT and RPS are the two most effective and powerful market generating policy tools.  FIT was initiated in 2002 and came to an end by 2011, replaced by RPS in 2012. In between the major two policy tools, renewable portfolio agreement (RPA) had been implemented as a bridge in the transitional period



Other Programs: In addition to those two major policies, FIT and RPS, a set of policies and programs are in place for development and deployment of NREs in terms of relevant industry promotion and market expansion. To name a few, NRE facility and equipment investment subsidies, regional deployment subsidy program, Million Green Homes Program, loans and tax incentive program, and NRE mandatory use for public buildings, Renewable Fuel Standards (RFS) for biofuel deployment.





The Environment and Safety



Policy is an organized set of actions devised to respond to a problem. When a problem emerges, a crisis could result if countervailing policy measures are not adopted. Ideally, policy is made before a problem reaches a crisis level by effectively identifying and mitigating risks. Assessing the agenda and priorities also contributes to this policy-making process. However, in Korea’s energy policy, this ideal has not been attained, and almost all the policies reflected a reaction to unanticipated problems.



Developing countries recognize the Korean economic achievement, but without a systematic approach to understand how Korea attained its unprecedented economic growth, the steps required to emulate this success remain unclear.  Government leadership was quite important in shaping a sound energy mix on a long-term basis. The government played a key role, particularly in planning and implementing energy policy but also in financing the energy projects and developing and importing energy-related technology.

Having accumulated decades of experience solving energy problems, Korea has emerged as one of the G10 energy economies from the world-poorest one. The once firewood dominant traditional energy structure has been transformed to a modern structure in which world-top class industries deliver a variety of energy services. This evidence may support the assertion that Korea’s energy policy has been at least somewhat successful. Then, what lessons could be learned from history?



First, in the case of Korea, each policy challenge was met by a corresponding policy action. Sometimes, the policy response was delayed such as to the environmental crisis or some policies drifted such as the energy security policies during the first oil shock. However, it is important that most problems were eventually met by policies which enabled solutions to proceed. This implies that Korea’s energy policy process was kept healthy since it was could be flexible to the changing internal and external variables.



Second, the solutions generated considered the long-term processes of a decade or more. The Korean domestic coal development policy and the oilization policy, for example, each evolved over a decade. The security enhancement policy went through two decades of evolutionary process to realize its goals. The governance reform policy aimed at expanding the application of market mechanisms was launched more than 20 years ago and is still evolving. This implies that in the real-world, there is no one policy to address all issues. Rather, in order to resolve a problem, policy efforts need to be promoted consistently over a decade or decades with clear a task orientation and ongoing modifications as lessons are learned through implementation.



Third, another important point is that Korea’s energy policy process has adopted been a variety of plan systems, such as the previous five-year economic development plan, the current plans for national energy basic and the long-term electric power supply and demand. A plan system is an indispensable tool to organize policy efforts and to correct policy errors through feedback mechanisms. More than these, it is a tool that allows for a continuous conversation between the policy and the implementation to allow the policy to evolve.



Last, but, not the least, each policy regime was equipped with corresponding institutions and financial mechanisms. Successful policy implementation requires the corresponding institutions such as laws and organizations to be enacted along with adequate financial support.