The Ministry of Climate, Energy and Environment has announced the first competitive bidding for fixed-price contracts for solar power this year. This bidding marks the last year before the reform of the Renewable Portfolio Standard (RPS) system, with the government aiming to expand the adoption of renewable energy while simultaneously driving down prices through a transition to a long-term fixed-price contract market.
On July 16, at 10 a.m., the ministry announced the first competitive bidding for fixed-price contracts for solar power for 2026 on the Korea Energy Agency's website. The bidding capacity is set at around 1,000 MW, similar to previous years. The bidding price cap has been set at 147.686 won per kWh, approximately 5% lower than last year's cap.
The ministry explained that the bidding capacity was determined based on solar power deployment performance and bidding demand, while the price cap was adjusted considering trends in the domestic solar power levelized cost of energy (LCOE) and market conditions.
Additionally, a preferential price will be applied to businesses using carbon verification modules. This system evaluates the carbon emissions generated during the production of solar modules and assigns grades. Using modules rated 1 or 2 will add a preferential price to the bidding selection price, with this year's preferential prices set at 16 won per kWh for grade 1 and 7 won per kWh for grade 2. Compared to last year, the grade 1 price has increased by 4 won, while the grade 2 price has decreased by 2 won.
In May, the government outlined its policy direction to gradually lower the contract prices for solar power in its first basic plan for renewable energy. This indicates a commitment to induce economies of scale from the expansion of renewable energy and to initiate a decline in prices.
This bidding represents the last RPS-based bidding for solar power operators before the system transition. While the lower price cap may intensify competition among operators, securing a long-term contract could provide revenue stability, suggesting continued interest in participation.
The ministry and the Korea Energy Agency will hold an online briefing for operators on July 21, focusing on the changes in this announcement. Shin Jin-soo, the director of renewable energy policy at the ministry, stated, "The reform of the RPS system is key to promoting competition among operators through the long-term fixed-price contract market, ensuring stable long-term profits for selected projects, and facilitating the expansion of deployment and price reduction policies."
* This article has been translated by AI.
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