New and Renewable Energy RD&D Basic Plan
In February 2001, the government announced a New and Renewable Energy RD & D Basic Plan, which updated the programme begun in 1987, as a renewed framework for further development of renewables. Wind and photovoltaic power are targeted as top-priority technology areas on which the government will focus its R & D support. Other areas targeted are solar thermal, waste and biomass. From 2001 to 2006, the government plans to invest around US$ 800 million to disseminate renewable energy technology. It envisages the following measures: - Providing financial support and preferential tax treatments for RD & D renewable technologies. Financial assistance includes low-interest loans (5.5% with a three-year grace period and five years to repay) for companies that install renewable energy technologies. A company can deduct up to 10% of its investment in R & D on renewables from its corporate tax. - Introducing renewable portfolio standards (RPS) and making it mandatory for wholesale purchasers of electricity to buy at least 1% of their electricity from renewables. So far, this concerns only KEPCO. The government is also planning to require public institutions to buy renewable energy equipment. The aim is to meet 2% of the total energy demand from public institutes through renewable energy sources. - Establishing a mechanism by which surplus electricity sold to KEPCOs grid from renewable energy facilities will be purchased at rates that provide sufficient incentives to make renewable energy projects viable.
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