IMARC Group has recently released a new research study titled “South Korea Renewable Energy Market Report by Type (Wind, Solar, Hydro, and Others), End User (Industrial, Residential, Commercial), and Region 2025-2033”, offers a detailed analysis of the market drivers, segmentation, growth opportunities, trends and competitive landscape to understand the current and future market scenarios.
South Korea Renewable Energy Market Overview
The South Korea Renewable Energy Market size reached a size of 55.6 TWh in 2024 and is projected to grow to 124.7 TWh by 2033. The market is expected to exhibit a robust CAGR of 8.6% during the forecast period 2025-2033. Growth is driven by favorable government policies, technological advancements, and increasing demand for sustainable energy.
Study Assumption Years
- Base Year: 2024
- Historical Year/Period: 2019-2024
- Forecast Year/Period: 2025-2033
South Korea Renewable Energy Market Key Takeaways
- Current Market Size: 55.6 TWh in 2024
- CAGR: 8.6% (2025-2033)
- Forecast Period: 2025-2033
- The market is propelled by governmental policies like the Renewable Portfolio Standard and financial incentives, including tax benefits and subsidies.
- Increasing R&D investments improve cost-effectiveness and efficiency of solar, wind, and hydroelectric power.
- Urbanization drives higher energy consumption, boosting renewable energy demand, with 91.9% of the population living in cities as of 2022.
- The industrial sector is a major consumer of renewable energy, employing it for cost management and sustainability.
- Seoul Capital Area leads regional demand due to population density and strong green policies.
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Market Growth Factors
The South Korea renewable energy market growth is driven by a combination of governmental policies, technological advancements, and societal demand for sustainable solutions. The government offers financial incentives such as tax benefits and subsidies that encourage businesses and consumers to adopt renewable energy. These include rebate programs, feed-in tariffs, and power purchase agreements that help mitigate financial risks for developers and investors.
Technological innovation plays a significant role as South Korea invests heavily in R&D. Advancements in solar photovoltaic technology, wind turbines, and hydroelectric power infrastructure improve energy efficiency and reduce costs, making renewable energy more accessible and competitive compared to traditional fossil fuels.
Furthermore, the Green New Deal and 2050 carbon neutrality goals have set ambitious targets. For example, the government aims to generate 20% of power from renewable sources by 2030 and planned investments of USD 6.8 billion by 2025 in wind, solar, and hydrogen projects. These initiatives are complemented by efforts to build 12 gigawatts of offshore wind power by 2030, driving the expansion of renewable capacity.
Market Segmentation
Breakup by Type:
- Wind: South Korea has significant wind energy potential, particularly in coastal and rural areas, with growing onshore wind farms.
- Solar: Solar energy has experienced substantial growth fueled by declining photovoltaic costs and supportive government policies, including large-scale solar farms, rooftop installations, and floating solar projects.
- Hydro: The country has established hydroelectric power infrastructure, consisting of several large dams and operating hydroelectric plants.
Breakup by End User:
- Industrial: Major energy consumer using renewable energy to manage costs and meet sustainability goals.
- Commercial: Increasing installation of solar PV systems on rooftops and parking lots in commercial buildings such as offices and shopping centers drives growth.
Breakup by Region:
- Seoul Capital Area: Includes Seoul, Incheon, and Gyeonggi Province; driven by large population, high energy consumption, and ambitious environmental policies.
- Yeongnam (Southeastern Region): Includes Busan, Ulsan, and Gyeongsangbuk-do; an industrialized area with significant energy consumption and growing interest in wind and solar power.
- Honam (Southwestern Region): Includes Gwangju and Jeonju; mix of agricultural and residential areas with growing renewable energy interest.
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Regional Insights
The dominant region in the South Korea renewable energy market is the Seoul Capital Area, comprising Seoul, Incheon, and Gyeonggi Province, with substantial demand driven by its large population, high energy consumption, and progressive environmental policies. This region leads in renewable energy adoption due to government initiatives mandating solar installations on new buildings, energy efficiency programs, and green certifications.
Recent Developments & News
- August 2024: South Korea's Vice Minister of Trade, Industry, and Energy launched the Offshore Wind Power Competitive Bidding Roadmap at the Korea Chamber of Commerce and Industry (KCCI) in Seoul.
- July 2024: Peak Energy signed an agreement with Shinsung E&G and YSP to establish a 50 MW solar portfolio in South Korea.
- June 2024: The South Korean government announced an auction for clean-hydrogen-fired power generation, targeting up to 6,500 GWh per year (equivalent to a 100 MW baseload power plant) over a 15-year period starting in 2028.
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