Even If Solar Farms Are Built, There May Be Nowhere to Send the Power... 65% of 'Sunlight Income Village' Budget Goes to Chungcheong and Honam [Climate Ministry Budget Deep Dive 2]

42 billion won allocated despite uncertainty over grid connections
No spare grid capacity confirmed at any of 12 sites in Honam

The government has allocated 42 billion won, or 65% of the total budget for its Sunlight Income Village program, to the Chungcheong and Honam regions, where it is unclear whether projects can be connected to the power grid, raising questions about the program’s feasibility. A preliminary demand survey also failed to confirm that these regions had sufficient spare capacity in the power grid.

Spare grid capacity confirmed at 0 of 12 sites in Honam

According to the National Assembly Budget Office’s “Analysis of the 2027 Budget Proposal by Committee,” released on November 13, the Ministry of Climate, Energy and Environment has newly established the “Renewable Energy Project to Increase the Income of Local Residents” and allocated 78.06 billion won for it. The project aims to increase the income of residents in water-source protection areas by sharing solar power revenue with them. Of this amount, 65.1 billion won is budgeted for the Sunlight Income Village program, which provides full project funding from river basin management funds to projects where at least 10 residents form a cooperative and install a solar power plant with a capacity of 300-1,000 kW. By river basin, the allocations are 16.1 billion won for the Han River (23 sites), 7 billion won for the Nakdong River (10 sites), 17.5 billion won for the Geum River (25 sites), and 24.5 billion won for the Yeongsan and Seomjin rivers (35 sites). The Geum, Yeongsan, and Seomjin river basins account for 64.5% of the total.

The problem is that conditions for connecting to the power grid are poor in these two river basins. Spare grid capacity refers to the capacity available to transmit additional electricity from power plants through the existing transmission and distribution network. If there is insufficient spare capacity, restrictions may prevent a power plant from connecting the electricity it generates to the grid, even after it is built. An analysis by the National Assembly Budget Office of a preliminary demand survey conducted as of September this year found spare capacity at 16 of the 24 applicant villages in the Han River basin and 4 of the 7 in the Nakdong River basin. By contrast, spare capacity was found at only 2 of the 11 sites in the Geum River basin and at none of the 12 sites in the Yeongsan and Seomjin river basins. Even if installation costs are fully covered, the program will struggle to achieve its goal of increasing residents’ income if the electricity cannot be connected to the grid and generate revenue.

◆Climate Ministry: “We will secure priority grid access by linking with the Interior Ministry’s program”; Budget Office recommends adjusting allocation=The Climate Ministry says it will first select villages with confirmed spare capacity and address shortages in other areas by linking the program with the Ministry of the Interior and Safety’s “Sunlight Income Village Program.” An official from the Climate Ministry said, “We allocated funding for the Geum, Yeongsan, and Seomjin rivers on the understanding that we are coordinating to ensure villages can receive priority grid access if selected through the Interior Ministry’s program.” The Budget Office, however, said this alone would not resolve grid constraints in Honam. Of the 86 sites selected in the first round of the Interior Ministry’s program, 58 need power grid improvements, and 31 of those are in Honam, the largest number of any region. The Budget Office said that, because spare grid capacity has also not been confirmed in the Yeongsan and Seomjin river basins, linking the programs would not guarantee that the sites could actually be connected to the grid.

It also raised concerns about overlapping support from the two programs. The Interior Ministry’s program provides loans, while the water-source protection area program covers 100% of costs with national government funds. The two programs could target the same villages, as 8 of the 86 villages selected by the Interior Ministry are in water-source protection areas. The Budget Office recommended that the Climate Ministry closely assess grid connection conditions and adjust the budget based on the number of villages that can actually be selected in 2027. It also said the ministry should consider measures to overcome grid constraints, such as supporting the installation of energy storage systems (ESS) using surplus funds from river basin management funds.

This content was produced with the assistance of AI translation services.