1. November, 2004 KEMCO Korea Energy Management Corporation

2. contents Energy Status (2003) Ⅰ Category of NRE Ⅱ History of NRE Policies Ⅲ Investment For NRE Ⅳ Achievements In NRE Ⅴ Dissemination Target Ⅵ Budget Plan Ⅶ NRE Policies Ⅷ NRE Village Power Project Ⅸ

3. Ⅰ. Energy Status (2003) Continuous Increase in Energy Consumption 6.4% 5.2% 3.1% 43.9 192.9 208.6 215.2 Million TOE 6.9% 1.6 1.0 0.1 Source : KEMCO (2004)Source : IEA (2001) Average Growth Rate of Energy Consumption (’91~’01) Growth Trend of Energy Consumption

4. Source : KEMCO (2004) High dependency on energy imports Imports about 97% of the energy used More than 79% of oil from the Middle East Ⅰ. Energy Status (2003) 79.573.376.973.798.8 Import from the Middle East of total oil 47.649.152.053.861.3Oil in total energy 96.997.2 87.973.5Energy Imports ’03’02’00’90’80 Classification Energy Imports (2003)

5. Ⅱ. Category of NRE 11 types are included in the promotion Act for NRE

6. Ⅲ. History of NRE Policies Promulgation of the Promotion Act for NRE Development Making the legal basis of NRE Technology Development 1987 Amendment of the Promotion Act for NRE Development, Utilization & Dissemination Making the legal basis of NRE Dissemination 1997 Amendment of the Promotion Act for NRE Development, Utilization & Dissemination Including Obligation to the Public Office, Certification, F-I-T etc. 2002 10 Year National Basic Plan For NRE Technology Development and Dissemination Target : 3% by 2006, 5% by 2011 2003

7. Ⅳ. Investment For NRE Budget from 1988-2003 amount to a total of 642.3 billion won R&D : 183.5billion, Subsidies : 105.2 billion, Loans : 353.5 761,377119,063Total 346,773-Loans 108,7613,525Subsidy 299,052115,538Sum 22,0942,51219,582ETC 93,81942,91550,904Hydrogen / Fuel Cell 28,58110,96617,615Wind 29,32611,64417,682coal liquefaction,gasification 31,09415,62415,470Waste 31,63711,09520,542Bio 44,47716,63727,840Photovoltaic 18,0244,14513,879Solar Thermal R & D TotalPrivateGovernment Classification 183,514 642,314 353,564 105,236

8. Ⅴ. Achievements In NRE Very low compared to advanced countries Ratio on NRE/Total Energy Consumption is 2.1% 2.1% 10.4% 7.0 4.3 2.6 3.0 Source : Renewables Information, IEA, 2003. (Figure of Korea is from 2003, other countries from 2001)

9. Ⅴ. Achievements In NRE Waste & Hydro power accounted for the most 0.11.9 Telephone facilities, communications and Streetlighting 6MW Photovol- taic 0.15.2 115 unit in Jeju and the Northen Jeolla povince 18MW Wind 0.732.9 187,000 heating system, 2700 medium- and Large equipment and facilities Solar Thermal 3.0131.1 110 units including landfill gas, food-processing Bio 27.61,225.6 Large Hydro (16 units,1,531MW), small hydro (33 units, 48MW) Hydro 68.53,039.3 460 units in Seoul, Gyeonggi, Busan etc Waste % Amount (100toe) Details Resource Amount And percentage of supply by individual energy resources

10. Ⅵ. Dissemination Target 8.01.1- Geothermal 9.72.20.1 Wind 2.50.60.1 Photovoltaic 2.41.50.7 Solar Thermal 7.87.13.0 Bio 12.317.127.6 Hydro 57.371.368.5 Waste 201120062003Resources Annual Target (%) 5% of total energy Consumption by 2001 532.1Goal

11. Ⅶ. Budget Plan 91,026 26,04318,08313,77710,6777,7296,6174,5803,520 Total 30,620 10,6006,3004,1003,3002,2801,8001,340900 Loans 44,581 12,1088,8887,2175,3523,8243,4122,1101,670 Subsidies 15,825 3,3352,8952,4062,0251,6251,4051,130950 R & D Total 20112010200920082007200620052004 (unit : 100million won) Annual Budget Plan 9.1 trillion won will be used for NRE By 2011 R & D : 1.5 trillion, Subsidies : 4.4 trillion, Loans : 3 trillion

12. 1. R & D and Infrastructure R & D Maximization of R&D investment effect by priority selection and concentration Maximization of R&D investment effect by priority selection and concentration Ⅷ. NRE Policies 1,000 people from industry, academia and research institutes will be participate 250 billion won for five years (2004-2008) will be invested Hydrogen / fuel cells, photovoltaic and wind will receive major support

13. The infrastructure Establishing a master plan and a mid-to-long-term vision on the “hydrogen economy” Evaluating performance of developed products, carrying out field tests -expending research complexes for field tests and institutions for performance evaluation Strengthening International cooperation at multilateral and bilateral levels -e.g. Korea-Mongolia joint research project, IPHE, IEA etc Ⅷ. NRE Policies 1. R & D and Infrastructure

14. The government covers 70% of the installment coats and the user will cover the remaining 30% When constructing a public building exceeding 3,000 square meters, 5% of total construction costs should be used in installing NRE facilities. Mandatory programs for NRE facilites Installment at public Institutions 100,000 photovoltaic house programs by 2012 2. Dissemination programs Ⅷ. NRE Policies

15. The support measures are equal to that of the program for distribution of photovoltaic houses. Subsidies which are currently provided to electricity generated from NRE. They are financed with the government funds. The subsidy program will be expanded to bio and IGCC in the Future Establishment of ‘Green Village’ A village made up of around 50 houses that depend wholly on NRE. General subsidies program for dissemination of NRE facilities Feed-in Tariff for NRE electricity generation Ⅷ. NRE Policies 2. Dissemination programs

16. 62.81SMP+CP65.2073.69107.66746.40 Fixed Price Tide power Waste Landfill gas Small hydro Wind Photovol- taic Resource 10-year installment payment with a five-year grace period on annual interest rate of 3.5% (floating interest rate) Fixed Prices of individual resource (won / Kwh) Loan program Ⅷ. NRE Policies 2. Dissemination programs

17. Ⅸ. NRE Village Power Project DURE-Gobi Project Development and Utilization of PV/Wind Power Generation Systems for Rural Electrification in Gobi Desert

18.  Korea-Mongolia International Cooperation Jun 2003 – May 2005(24 Month) Diversification of NRE Technology Cooperation through the Expansion of Bilateral Cooperation with Mongolia Solar Ger System for Desert Area Electrification System Design Optimization, Field Test and Demonstration of Photovoltaic-Wind Hybrid Generation for Village Electrification Ⅸ. NRE Village Power Project

19.  System Illustration 50W (DC Type) General System for pastorals 150W (AC Type) High Level System for Pastorals Solar Home System ×3 area  DC provision for low price  bulb(12W), mono TV(20W), radio(8W)  AC provision for 1house 2Ger or high level household appliances  bulb(12W) 2~3, color TV(50W), radio(8W) Ⅸ. NRE Village Power Project

20. 8kW (AC Type) PV 5kW + Wind 3kW 100W (AC Type) High Voltage Discharge Lamp ×1 area ×6 area Small village or public buildings(school etc) electrification Pump power source for desert irrigation Street Lamp along the Road PV Street Lamp Public Use System  System Illustration Ⅸ. NRE Village Power Project