S.Korea pairs state utility, private tech giants in $37 bln bid to seize global green energy lead

HYOSUNG

13/12/2016 23:00

* Seoul pools KEPCO, Samsung, others in renewables drive 
    * Sees batteries, smart grids opening new global business 
    * Questions over future of clean energy in U.S., China 
    * S. Korea seeks to double home green power supply by 2021 
 
    By Jane Chung 
    SEOUL, Dec 14 (Reuters) - South Korea aims to vault from 
laggard to leader in the renewable energy industry, as Seoul 
prepares to hook the country's tech giants up to nearly $40 
billion in public funds in a bold plan to become a new global 
leader in green power.  
    Amid questions over the future of clean energy in the United 
States under President-elect Donald Trump, as well as China's 
appetite for cutting fossil fuel reliance, Seoul is accelerating 
into battery and 'smart' grid technology - vital to store and 
transmit power whose generation changes with the weather.  
    Fresh from unveiling a 42 trillion won ($37 billion) support 
package, Seoul said last month it now aims to double the amount 
of green energy it produces by 2025 - 10 years ahead of previous 
plans. As well as cutting overwhelming reliance on coal and 
nuclear power, the plan aims to tap into the prowess of Korean 
tech leaders like Samsung - previously focused on consumer 
electronics - to build a major new export industry.  urn:newsml:reuters.com:*:nL4N1DUIG 
    "South Korea definitely has the potential when it comes to 
clean tech because of government incentives but also the already 
established companies there," said Vishal Sapru, Program 
Manager, Power Quality/Power Supplies at consultancy Frost & 
Sullivan. "They are strong contenders when it comes to 
utility-scale storage...They have the bandwidth to meet 
aggressive demand." 
    The push by Asia's 4th-largest economy comes as global 
climate change treaty commitments dovetail with a race among the 
world's tech firms for new revenue streams while growth in goods 
like smartphones slows. The International Energy Agency now sees 
28 percent of the world's power being generated from renewable 
sources by 2021, up from 23 percent in 2015.  urn:newsml:reuters.com:*:nL8N1CU6NN 
     
    THE KEPCO CONNECTION 
    Firms from General Electric  GE.N  to Europe's ABB  ABBN.S  
are eyeing growth in smart grids and batteries - and have a head 
start. But by combining the power transmission know-how of its 
state utilities with private sector expertise in batteries and 
power controls, South Korea is well placed to gain ground, 
industry executives say. 
    "One of Korea's strengths is IT technology, particularly 
semiconductors and battery," said Lee Jeong-min, a senior 
manager of energy storage systems sales team at Hyosung Corp 
 004800.KS . "If we link them together with new energy business, 
we can catch up." 
    Hyosung is among several private firms partnering with state 
utility Korea Electric Power Corp (KEPCO)  015760.KS  to develop 
smart grid and energy storage systems at home and in 
international markets.  
    KEPCO is now working on some 40 overseas energy and power 
distribution projects. It agreed in November with the U.S. state 
of Virginia to develop 10 energy projects, echoing similar deals 
it has agreed with Canada's Ontario state as well as Dubai. 
    "We play our role in operating the power grid and leading 
new businesses, while private sector partners do their part by 
making products and supplying them," Hwang Woohyun, vice 
president of KEPCO, told Reuters in an interview. 
     
    BOOST FOR SAMSUNG SDI 
    To help extend Korean companies' global reach, KEPCO plans 
to invest 8.3 trillion won in collaborative programmes by 2020. 
Meanwhile partner Samsung SDI  006400.KS  is eying 3 trillion 
won in investments on battery development by 2020. 
    LG Chem  051910.KS  is also bullish on energy storage as 
solar panel costs drop and government support rises. 
    "This year energy storage system revenue is expected to grow 
over 60 percent to 270 billion won and to increase further next 
year, about 80 percent to more than 500 billion won," Kang 
Chang-Beom, LG Chem vice president said in a recent conference 
call. 
    For SDI, part of the Samsung empire and the world's top 
maker of handset batteries, the government push offers a way to 
help it further expand into energy storage systems. 
    That could help SDI not only sidestep slowing smartphone 
growth: as the supplier of batteries to Samsung Electronics Co's 
 005930.KS  fire-prone Galaxy Note 7 handset, it has been hit 
hard by the scrapping of the device.  urn:newsml:reuters.com:*:nL4N1CP26P 
 
($1 = 1,167.1800 won) 
 
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GRAPHIC: South Korea's power generation plan    http://tmsnrt.rs/2guK7Tg 
GRAPHIC: Global climate change - the Paris Agreement    http://tmsnrt.rs/2fTjA1w 
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 (Reporting by Jane Chung; Additional reporting by Nina Chestney 
in LONDON; Editing by Kenneth Maxwell) 
 ((jane.chung@thomsonreuters.com; +82 2 3704 5667; Reuters 
Messaging: jane.chung.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA RENEWABLES/