South Korea Adds Carbon Criteria To Solar Tender

The Korea Energy Agency (KEA) has released details of its upcoming solar fixed-price contract tender under the Renewable Portfolio Standard (RPS) regime, with applications expected to open in early June 2026. Results are likely to be announced by late July this year. 

The ceiling price for solar fixed-price contracts has fallen in recent years in the country. In 2025, the maximum bid price was KRW 155,742 ($103.33)/MWh, down from KRW 157,307/MWh in 2024. KEA attributes the decline to lower solar generation costs and stronger competition among bidders. 

The 2026 tender is expected to place more focus on environmental performance, including the introduction of a carbon emissions assessment for solar modules for this round. Under this, projects can receive up to 20 points based on the carbon footprint of modules used, with lower-emission modules earning higher scores. Modules with carbon emissions of 630 kg CO₂/kW or less will receive the highest rating, while those exceeding 710 kg CO₂/kW will receive the lowest. This will lower the importance of the bid price. 

Moreover, proposed rule changes would give floating solar projects an extra 12 months to complete construction and pre-operation inspections after signing a power purchase agreement (PPA). Projects between 1 MW and 20 MW would have up to 24 months to reach completion, up from 12 months, while those between 20 MW and 100 MW would have up to 36 months, up from 24 months. Projects with capacities above 100 MW would have up to 48 months instead of 36 months. The deadline for projects below 1 MW would remain 7 months. The existing extension rules would remain unchanged under the upcoming tender. 

The agency presented the tender plan during a briefing in Seoul, according to which it might be the last round under the current RPS framework as the country transitions towards government-managed renewable energy auctions. 

Under the current RPS system, large power producers must either generate a portion of their electricity from renewable sources or purchase Renewable Energy Certificates (RECs). From its introduction in 2017 to 2025, South Korea offered a total of 14.81 GW of solar capacity through its fixed-price contract bidding program, selecting 10.64 GW of capacity. 

As per the proposed changes to the auction mechanism, South Korea plans to stop issuing new RECs after 2026, although existing renewable energy projects will continue to receive the same. The proposed auction system, which will replace the RPS regime, would allow the government to determine how much renewable energy capacity is needed and award long-term contracts through competitive bidding, following similar arrangements used in countries such as the UK, Germany, and Japan.  

The REC spot market is also expected to be phased out after a 3-year transition period. During that time, a separate conversion market will be created to support the shift to the new system. 

As part of the reform, the government plans to encourage greater use of renewable energy PPAs. KEA explained that the move to contract-based fixed-price tenders is expected to support cost-effective deployment of renewable energy, strengthen the domestic solar industry, and provide developers with stable long-term revenue through contracts with KEPCO. The agency also expects the model to lower financing costs for projects. The plan, however, requires government clearance to come into effect. 

South Korea is aiming to achieve 100 GW renewable energy capacity before 2030 amid plans to phase out 60 operational coal fired power plants by 2040 (see South Korea To Target 100 GW RE Capacity Ahead Of 2030).