Smart grid technology, which uses digital communications to boost the stability and efficiency of electricity delivery to consumers, tends to vary from country to country depending on the local infrastructure, industrial structure, and technical skills. Established relatively recently and continuously refined, Korea’s electric power infrastructure has been able to maintain a high level of performance.
In 2008, Korea’s power supply was interrupted for a total of 14.29 minutes. Compared with France, the United Kingdom, and the USA – which saw supply interrupted for 57, 68, and 122 minutes, respectively – Korea’s power supply is highly stable. Korea also has one of the world’s lowest power transmission and distribution loss rates. Considering only these indices, the power grid in Korea may already be ‘smart’enough, and it is necessary to understand the ultimate direction of the smart grid policies being pursued by the government in this context.
The core objective of the smart grid initiative being pursued by Korea is to secure the continuous reliability of the power system. It is expected that future power generation methods, system operation, and the accommodation of ‘prosumer’ households will increase the complexity of the power grid, resulting in significant problems for power system reliability. The installation of an intelligent power grid is consequently inevitable.
Korea is implementing low carbon power configuration in order to address climate change. Under the fifth basic power supply plan, power generation capacity will be increased to approximately 100 million kilowatts (kW) by 2024, with the proportions of renewable energy and nuclear power generation boosted to 8.8 per cent and 47.7 per cent, respectively. Low-carbon emission power cannot be fully controlled using conventional methods of system operation. Other factors will also conspire to make the stable and reliable operation of power systems a challenge, such as the difficulty of installing power transmission towers and introducing energy storage devices and the increased diffusion of electric cards and smart home appliances. A new type of power system will be required for the future, driving Korea to push its already advanced power grid to an even ‘smarter’ level.
The second core objective is to create a driving force for growth by promoting industry convergence. Smart grids have been studied in many countries and gained traction when the USA accelerated smart grid investment as part of its economic stimulus package to cope with the Global Financial Crisis. A huge market opportunity is being opened as the world attempts to replace and expand power infrastructure and the smart grid system should be adopted as the standard.
However, the electric power industry in Korea has been focusing on domestic demand, making it difficult to access potential markets overseas. Korea has been developing new power system technologies on a large scale since the early 2000s. A smart grid initiative was started in 2005 under the name of Electric Power IT, the main goal of which was to secure the technical skills required to advance electric power infrastructure. The program pursued core technology development with the aim of securing technical competitiveness for commercialisation and was mainly limited to the heavy electric machine industry, with an investment of approximately 280 billion won (US$242m).
“A new type of power system will be required for the future, driving Korea to push its already advanced power grid to an even “smarter” level”
The present government has identified smart grid technology as a core element of green growth. For this reason, Korea has developed and is operating a large-scale convergence-type pilot complex in Gujwa-eup, Jeju Island, with the participation of 190 companies, including communication service providers, home appliance manufacturers, construction companies and heavy electric machinery firms. The various corporations based in the Jeju Smart Grid Pilot Complex are attempting to develop a smart grid platform and applications business. The government will present and verify a global model based on the experience of the pilot complex, and support the commercialization of smart grid technology at the early stage. This convergent approach could lead to a significant breakthrough in the global market in future.
Korea is trying to gain momentum through industry convergence-type innovation, instead of pursuing gradual, limited R&D, in order to raise the level of electric power and communication infrastructure using the smart grid. New attempts are being made to converge industries with IT-based industrial infrastructures in which Korea has strengths, such as combining the power industry with the transportation industry to produce electric cars or the power industry with consumer and home networks. Ultimately, Korea aims to secure proprietary core capabilities that are different from those of other countries, creating new business models through convergence.
The government is working on enacting the Intelligent Power Grid Promotion Law in order to promote convergence among heterogeneous industries and foster new technologies and services. It is expected that new legislation could be introduced by the first half of 2011. Once this law has been enacted, more investment could be made in the smart grid and new services and convergence will be better supported.
It will not be easy to determine whether efforts for innovation in the power sector and convergence among heterogeneous industries have been successful or not. However, the smart grid will provide a massive opportunity to both the power industry and the communication industry, enabling them to cooperate strategically for joint entry into overseas markets. In addition, mutual cooperation would be helpful for both the home appliance car industries, given that smart home appliances and electric cars will inevitably be adopted in the future. Convergence is also required for the smart city, a hot topic of discussion these days, because it requires the creation of an integrated social infrastructure (power, communication, water, sewage, etc.) The ubiquitous or ‘u-City’ concept could improve its competitiveness through association with the smart grid from these perspectives.
Industry convergence is encountering considerable difficulty due to a lack of mutual understanding, conflict over revenue structures, and a shortage of core technologies. Despite these difficulties, a very dynamic and meaningful process of trial and error is taking place under the Jeju Pilot Project, encompassing the search for new services, the exploration of the possibility of joint entry into overseas market by various industries, and the discovery and pursuit of necessary core technologies. A ‘productive bubble’ is being created in Jeju that will create a new type of growth engine for Korea.