The Korean government has announced a major investment of approximately 321 billion KRW in 2024 to accelerate the transition to a decarbonized society by building a next-generation distributed power grid. This initiative, led by the Ministry of Climate, Energy and Environment, was discussed at the Distributed Power Grid Forum in Seoul with participation from industry, academia, and public agencies. The new grid system is designed to maximize the integration of distributed energy sources like solar power and to enable regionally optimized energy production and consumption. The policy aims to address grid saturation and support Korea’s carbon neutrality goals.
Key stakeholders impacted include energy companies, public institutions, universities, and local communities, especially those involved in renewable energy generation and consumption. The plan will introduce energy storage systems (ESS) to overloaded distribution networks, enabling additional solar connections and stabilizing grid operations. By 2030, a total of 85 ESS units are expected to be installed, starting with 20 in 2024, potentially allowing for 485MW of new solar capacity. The policy also supports microgrids for industrial parks and university areas, and introduces flexible grid connection rules to accommodate more renewable energy.
Implementation begins in 2024 with the selection of project operators in the second quarter, following a public call in the first quarter. The government will pilot the Network Non-Wires Alternatives (NWAs) compensation system in Jeju in the first half of the year, expanding to the mainland by year-end. Market reforms will be tested in Jeju, including power demand bidding and renewable energy surplus management, with plans to extend these mechanisms nationwide. The government is also fostering an industrial ecosystem through the K-GRID Talent and Startup Valley and supporting R&D and investment attraction for next-generation grid technologies.
Frequently asked questions include how the new grid will handle renewable energy volatility and what compensation mechanisms are in place for ESS operators. The grid will use advanced distribution management systems (ADMS) to forecast solar output and dynamically control ESS charging to prevent overloads. ESS operators will be compensated through the NWAs system, which rewards grid flexibility instead of traditional infrastructure expansion. Project operators for ESS and microgrid deployment will be selected through a competitive process, with announcements expected in the second quarter of 2024.
South Korea’s distributed power grid initiative is a significant step toward achieving carbon neutrality and modernizing the nation’s energy infrastructure. By prioritizing energy storage, flexible grid management, and market reforms, the policy addresses both technical and economic challenges of renewable integration. The government’s collaboration with industry and academia, as well as the introduction of compensation for grid flexibility, are likely to drive innovation and investment. This approach could position Korea as a leader in next-generation energy systems and provide valuable lessons for other countries.