South Korea Moves to Replace Renewable Portfolio Standard with Government-Led Auction System - News and Statistics

May 20, 2026

A substitute bill that would scrap South Korea’s Renewable Portfolio Standard and introduce a government-led auction mechanism has passed a crucial National Assembly committee this week.

The Climate, Energy, Environment and Labor Committee approved the substitute bill on May 19. The measure would dismantle the existing renewable energy certificate market and transition the country’s revenue support for solar and wind to centrally managed long-term contracts. The original proposal was introduced by Democratic Party lawmaker Kim Jung-ho and 11 co-sponsors.

The current Renewable Portfolio Standard, operational since 2012, mandates that power generation companies with over 500 megawatts of installed capacity source a compulsory portion of their output from renewables. That portion started at 2% and has increased to 15% this year, with a statutory maximum of 25%. Under this system, obligated utilities can comply by purchasing renewable energy certificates instead of directly constructing new renewable capacity. Proponents of the bill contend that dependence on certificate purchases has caused price instability and hindered actual deployment.

If the legislation passes the full National Assembly, the spot market for renewable energy certificates would be eliminated. The government would instead set auction volumes in advance, conduct competitive tenders, and grant long-term contracts to chosen developers, shifting revenue support from market-based certificate trading to administratively determined contract prices.

Energy Gyeongje Shinmun, a Korean energy trade publication, separately reported that climate advocacy group Plan 1.5 has criticized the substitute bill. The group stated that the amendment does not impose a limit on how much of the renewable obligation can be fulfilled through fee payments rather than direct capacity installation, potentially enabling companies to avoid constructing new facilities. Plan 1.5 also warned that private generators currently under mandatory obligations would be reclassified as target management entities, weakening enforceable requirements. The group argued that the framework should be reinforced rather than loosened.

The substitute bill now moves to the Legislation and Judiciary Committee before a plenary National Assembly vote. No timeline for these stages has been announced.

The committee approval follows recent actions by Seoul to accelerate solar deployment through direct procurement. The government conducted a 1 gigawatt solar tender in 2025 with a ceiling price structure and recently announced investment in grid upgrades, as well as plans to potentially expand a renewables bidding system pilot on Jeju island to the mainland.

South Korea had approximately 29.5 gigawatts of cumulative installed solar capacity by the end of 2024, according to Korean Energy Agency data. Renewables supplied 11.4% of the country’s electricity in 2025. The government is targeting at least 20% of power generation from renewables and 100 gigawatts of combined solar and wind capacity by 2030, according to a South Korean Ministry of Climate statement published in April.

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