IRKOM Brief

Carbon neutrality for global warming and overcoming the climate crisis is currently a top priority worldwide. At COP28 (28th Conference of the Parties to the United Nations Framework Convention on Climate Change), where more than 200 countries around the world gathered to discuss ways to respond to the climate crisis in early 2024, 123 countries promised to triple their renewable energy generation by 2030 and double their energy efficiency improvement rates. Among them, Korea also signed a pledge and vowed to participate. However, the reality of Korea's renewable energy industry is not very bright. The solar market, the most representative renewable energy source, is shrinking, and the vicious cycle of the market not growing due to soaring prices is repeated because supply cannot keep up with demand. Moreover, experts agree that the solar energy industry through R&D is slower than that of China and other countries, so it has been pushed out of the competition.
Despite the expanded opportunities due to the revitalization of the RE100 market, the reasons for the slow development of the domestic solar energy industry include the government's R&D budget cuts, economic downturn, and high interest rates. In addition, the government's negative policies, such as lowering the share of new and renewable energy in 2024, have deprived the government of the opportunity to revitalize the market. It is not just a problem in the R&D sector. Global solar installations exceeded 400 GW in 2023 due to increased demand in the Chinese and U.S. markets and are expected to exceed 510 GW in  2024, according to a study by the Export-Import Bank of Korea's Overseas Economic Center. However, the amount of solar installed in  Korea is only 2.5 to 3 GW, showing very low performance compared to the exponentially increasing global trend.

 

[Source: Flaxres  Homepage]

The domestic solar energy industry is struggling due to the government's passive response and policy. Hanwha Q Cells, the central pillar of the domestic solar industry, is reducing its business in earnest by suspending the operation of some factories and receiving voluntary retirement. Until now, based on aggressive investment and support from Hanwha  Group Vice Chairman Kim Dong-kwan, he has been striving to establish overseas factories and expand their market share. Nevertheless, as the amount of domestic installation and government support gradually decreases, the market shrinks,  so the business shrinks in line with the domestic situation.

Nevertheless, the more complex the time is, the more opportunities there are. As countries worldwide focus on revitalizing the  RE100 market,  Korean companies are also able to respond in line and preemptively to market conditions. In 2021, Hyundai Corporation diversified its business after changing its name from Hyundai General Corporation to its current mission while jumping into the renewable energy business as part of its diversification. It has increased investment in solar power plant operations by establishing three corporations in Japan and domestic solar power plants. It is speeding up the development of new and renewable energy by supplying solar modules and inverter products to  Europe, North America, Australia, Asia, and  Africa. In addition, it aims to realize a circular economy by expanding to an "eco-friendly recycling" business by acquiring a stake in German waste solar recycling company "Flexres."