South Korea's KDI warns grid and financing bottlenecks threaten 100 GW renewable energy goal

The Korean Development Institute (KDI) says South Korea will need to triple the current pace of renewable‑energy installations to meet its 2030 target of 100 GW of capacity. As of the first half‑year, cumulative installed capacity stood at 39.1 GW, meaning an average of 6.8 GW must be added each six‑month period – about four times the rate of the past five‑plus years.

KDI identifies two structural bottlenecks. First, the power‑transmission network has expanded only 26 % since 2003 while generation capacity grew 154 %, causing curtailments in renewable‑rich regions such as the Honam area and Jeju Island. Second, financing conditions are weak: revenue for projects depends on volatile wholesale electricity prices (SMP) and renewable‑energy certificate (REC) values, while long‑term fixed‑price contracts, power‑purchase agreements (PPA) and project‑finance markets remain underdeveloped. This uncertainty discourages private investment and raises borrowing costs.

The institute recommends simultaneous actions: rapid expansion of transmission lines and grid‑flexibility resources (including energy‑storage systems and demand‑response mechanisms), broader use of long‑term contracts and policy‑finance tools, and a predictable redesign of subsidy schemes. Only by addressing these grid and capital constraints can the 100 GW renewable‑energy goal become attainable.