Korea Aims for 30% of Smart Grid Worldwide

by: Greentech Media

by Jeff St. John

The South Korean government has declared its intention to help its home industries win 30 percent of the global smart grid market, Reuters reported Friday. But to start, the government will spend a relatively small 37 billion won ($32 million) to test smart grid systems from a consortium including SK Telecom (NYSE:SKM), LG Electronics (OTC:LGERF), Hyundai Heavy Industries (OTC:HYHZF) and national utility Korea Electric Power Corp., or KEPCO (NYSE:KEP).

The test will be on Jeju Island, a volcanic island between Korea and Japan with about 565,000 residents. State-run Korea Institute of Energy Technology Evaluation and Planning will coordinate the project, which is expected to start next year. The project will include a "smart transportation" system aimed at power and communications for electric vehicles, as well as a "smart renewable" side to integrate solar and wind energy, Reuters reported. It will also include two-way communications between the utility and customers to improve energy efficiency.

Eventually, the government wants to see its 68 trillion won ($58.3 billion) electricity market connected in a smart grid, it announced in July. That could save it about $10 billion a year in energy import costs, according to the country's Ministry of Knowledge Economy (see Korea Times). But Korea's declared goal to snap up nearly one-third of the global smart grid market – which could be anywhere from $20 billion to $160 billion or so over the coming decades, according to various estimates – might get more attention.

At the same time, Korea is being approached by smart grid-related offers from overseas. General Electric (NYSE:GE) wants to deploy about 300,000 smart meters with Korea's NURI Telecom, and San Jose, Calif.-based Echelon (NASDAQ:ELON) is working with Samsung (OTC:SSNLF) electronics for devices that monitor energy use in apartments in Korea, as well as in China (see GE Dives Into Korean Smart Meter Market With NURI Telecom and Echelon Beefs Up LonWorks). On the distribution grid side, Devens, Mass.-based American Superconductor (NASDAQ:AMSC) is selling its superconducting wires to Korea's LS Cable for a project it's doing with KEPCO (see Green Light post).