The Korea Energy Agency (KEA) has proposed a major reform of South Korea's renewable energy support framework, including the replacement of the Renewable Portfolio Standard (RPS) with a government-led contract market based on competitive auctions. The proposal forms part of efforts to support the deployment of 100 GW of renewable energy capacity by 2030.
According to KEA, the current RPS system faces several structural limitations, including constraints on expanding renewable energy obligations, a preference among obligated entities for purchasing Renewable Energy Certificates (RECs) rather than investing directly in projects, an over-reliance on small-scale developments and rising compliance costs.
Under the proposed framework, all new renewable energy projects would participate through technology-specific government auctions. Successful bidders would secure long-term contracts with Korea Electric Power Corporation (KEPCO), providing revenue certainty and supporting project financing.
The proposal also includes a dedicated auction track for small-scale projects. The threshold for small-scale participation would increase from 100 kW to below 1 MW, while community-owned projects would receive preferential treatment through dedicated procurement channels. Projects of 1 MW or larger could participate through virtual power plant aggregation schemes.
The reform would also introduce capacity-based deployment obligations. Public and private power generators would be required to meet targets through direct or equity investment in renewable energy projects, rather than through the purchase of RECs.
As part of the transition, the proposal would phase out the existing RPS and REC systems. New REC issuance would end after 2026, while new renewable energy projects entering the market from 2027 would be required to participate through the auction system. Existing contracts and obligations would remain in place during a transition period.
Under the proposal, RECs would be renamed Generation Information Certificates and would no longer function as tradable instruments, instead serving as records of renewable electricity generation and supporting initiatives such as RE100 verification.
The proposed legislative amendments are expected to be completed during 2026, with detailed implementation plans to follow and the new contract market system scheduled to take effect from 2027.
KEA said the reforms are intended to reduce renewable energy deployment costs through larger-scale development, strengthen domestic manufacturing of technologies including solar modules and wind turbines and increase community participation in renewable energy projects.
