Over the past several decades, South Korea has become a pre-eminent developer of technology, ranging from computers and electronics to automobiles. Companies like Hyundai, LG, and Samsung have entered the US market at the low end and gradually earned respect by offering their customers high quality products, often carrying prodigious warranties. But South Korea imports all of its coal, oil and gas, which means that paying high prices for energy could have a chilling effect on their global competitiveness.
One response to this has been a major initiative by the South Korea government to make the country a leader in Smart Grid technology as part of their 50-year Low Carbon Green Growth national vision. Working through their state-run electric transmission operator, KEPCO, South Korea is implementing one of the largest smart grid test projects in the world on Jeju Island. This is the first stop en route to its goal of a completely integrated smart grid by 2030. The smart grid will help alleviate concerns about the impact of energy prices on competitiveness by both reducing peak demand and by enabling the expanded use of renewable energy resources. At the same time, moving forward aggressively into this arena is enabling South Korea to become a major player in the worldwide smart grid technology market, joining the US and China at the forefront.
According to a special report on the subject from Zpryme, the South Korean Smart Grid Roadmap can be divided into five distinct spheres, including:
- smart places (integration of smart appliances into buildings and homes)
- smart renewables (utilization of micro-grids)
- smart electricity services (real-time demand trading)
- smart transportation(vehicle to grid) and
- smart power grid (interconnection between generation and load)
Each of these spheres contains some ambitious goals for the year 2030. Smart transportation has a goal of putting 2.5 million electric vehicles on the road along with 27,140 charging stations. Smart places aims to have 100% diffusion of the Advanced Metering Initiative (AMI) in place by then. Smart renewables will be serving 11% of the country’s electric load with 30% of households becoming energy self-sufficient in the same timeframe. Smart power grid and smart electricity services plan to have 30% of consumers participating in this program by then.
While the US government appears to be content to squander a vast fortune ensuring bankers’ bonuses while rewarding manufacturers for shipping jobs overseas, the South Koreans are using their money a little more wisely, investing over $15 billion by 2016 in its aim to capture 30 percent of the global smart grid market. Their lofty economic goals include a projected 50,000 annual jobs created, US$43 billion in avoided energy imports and $3 billion in avoided power generation costs.
Korea’s national roadmap breaks these long-term goals into three phases. Phase One is the initial construction of a smart grid test-bed on Jeju Island, scheduled to run from 2009 through 2012. It will include work on the Smart Power Grid, Smart Places and Smart Transportation, linking grid networks to consumers and EVs.
Phase Two consists of taking the best outcomes from the test-bed and commercializing them, expanding the smart grid into selected urban areas. This phase is expected to run through 2020. This expansion stage (2012-13) will focus on smart renewables and electricity service. Its goals are to provide new power services and accommodate renewable energy into the power grid. The final phase of the plan is the completion of the national smart grid, targeted to finish in 2030.
Jeju Island, an autonomous province more than 200 km south of mainland Korea and connected with a 300 MWHVDC line, is designated as the national test-bed for the five smart grid spheres. The test-bed will potentially see US$200 million invested between 2009 and 2013. A Total Operation Center which will serve as a hub for the various projects at work on island was recently completed. The test will include in-home displays, appliances, smart meters, renewables and EVs. It will include a PR center and four exhibition halls. One aim of the Jeju Island project is to draw conferences and provide in depth demonstrations to outside businesses, governments and universities in order to highlight South Korea’s accomplishments. Currently, the $65 million pilot program on Jeju has a fully integrated Smart Grid System for 6,000 households; wind farms and four distribution lines. There are currently over 160 companies involved in this development as many international players, eager to be involved in developing standards and determining direction, are bidding to be included.
These efforts to modernize the South Korean homeland are just the first steps in a much longer journey. In 2009, the Ministry of Knowledge Economy signed a Statement of Intent with the US Department of Energy to collaborate on smart grid technology and several other segments of the green-economy. Korea has also joined with Italy, in taking the lead in developing a Technology Action Plan for Smart Grids for the Major Economic Forum on Energy and Climate.
Last year, Korea signed an agreement with the US State of Illinois to collaborate on smart grid technology. The Korea Electrotechnology Research Institute and other related centers will work with Argonne National Laboratory and the University of Chicago to test and develop technologies. The Illinois Department of Commerce is participating in the pilot program on Jeju Island. Any commercialization resulting from this pilot will be rolled out in both countries and tested in both Chicago and Seoul.
South Korea’s $162 million Smart Grid Technology market is projected to grow at a compounded 12.3% annually over the next five years. The Zpryme report breaks down the projected growth by year for each of five segments (shown with their current revenue, in millions, and projected growth over the next five years):
- Software and hardware ($46.4/85%)
- Advanced metering infrastructure ($63.7/71%)
- Smart Transmission & Distribution equipment ($73.2/81%)
- Sensors ($50.4/101%)
- Communication & Wireless Infrastructure ($45.9/60%)
- Other ($10.1/90%)
As you can see, as the result of the aggressive push to deploy smart metering infrastructure, AMI and Smart T&D investments will predominate in the near term, though all segments are poised for significant growth.
For American companies, there are opportunities to contribute and collaborate, as several, including GE and IBM, already have. But what is clear, is that South Korea is taking the initiative, and has every intention of becoming a major player, both at home and around the world.
[Image Credit: Zpryme Smart Grid Insights, www.zpryme.com]
RP Siegel is the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water. Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.
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