POSCO’s RE100 Implementation Plan for using renewable energy
POSCO plans to secure a certificate of using renewable energy in preparation for an increase in the number of customer companies requesting products that use 100% renewable energy. To this end, POSCO has a plan to expand direct investment in renewable energy independent generation, but as for the renewable energy that is insufficient to secure independent generation, in the short-term, there is a plan to respond to RE100 requirements by 1) purchasing renewable energy through the green premium, Korean RE-100 system, or 2) by purchasing REC to provide it to customer companies. In the mid- to long-term, POSCO plans to secure renewable energy stably by directly promoting 3) PPA.
1) Green premium is a method in which a company purchases renewable energy by paying a green premium fee which is separate from the existing electricity charges to KEPCO, and KEPCO opens a bidding market once at the beginning of the year.
2) REC purchase is to purchase Renewable Energy Certificates through the trading platform of the Korea Energy Agency, and it can be purchased at any time twice a month. REC is exchanged to the certificate of use at the Korea Energy Agency and provided to customer companies. The amount of electricity used will vary depending on the type of steel product. However, if 50MWh of electricity is used to produce 100 tons, 1MWh corresponds to 1REC in the case of solar power generation, and 50RECs has to be purchased and provided to customer companies. As of December of 2021, the market price of 1REC is about 40,000 won, and 100 tons of RE100 products will cost about 2 million won additionally.
3) PPA (Power Purchase Agreement) is a method in which a company and a renewable energy generator sign a contract and trade electricity. In the case of mediation with KEPCO, it is called a third-party PPA, and in the case of a direct contract with a power generation company, it is called a direct PPA. If a company submits to the Korea Energy Agency the results of use of renewable energy purchased through a renewable energy generator, a certificate of using renewable energy can be issued.
