Green Premium: How the Bidding and Application Works

The first wall a supplier hits when it is first asked to switch to renewable energy is money and time. Putting up solar takes investment and land; signing a PPA means reviewing a contract measured in 10-year blocks. Green premium is the only option you can start without either of those. In return for voluntarily adding a payment on top of your electricity bill, you are recognised as having used that much renewable energy.

What kind of scheme is it?

It is an arrangement in which an electricity user pays a premium separately from the existing electricity bill and buys renewable electricity. It is operated in the form of bidding on KEPCO's Energy Marketplace (EN:TER).

For the sales volume, the Korea Energy Agency reports to the renewable energy use deliberation committee (재생에너지 사용 심의위원회) and the annual volume is set; KEPCO then issues that year's bidding notice, publishing the floor price and the sales volume together. The full amount of the premium paid by participating companies is transferred by KEPCO to the Korea Energy Agency each month and used as funding for reinvestment in renewable energy.

Can we take part?

What matters is that a route to participate is open even where there is no direct contract with KEPCO — a leased plant, or a tenant company in an industrial complex. There is no need to give up in advance just because the customer number is not in your name.

How the price is set — the rules of the bidding

Green premium is not a tariff with a set unit price; it is a bid. You write in yourself how much you will pay per kWh, and because the volume is limited it is allocated in order of the highest price offered.

So if you bid exactly at the floor price you can be pushed out when demand for the volume is heavy, and if you bid too high you spend more than you need to. The realistic approach is to decide by looking at the level of last year's winning prices. The trend in winning prices by round can be checked in Market data.

From application to certificate

The documents to prepare when applying are the certificate of corporate registration and the business registration certificate; mid-sized and small and medium enterprises additionally submit a company size certificate.

After the award, the contract term runs to 31 December of the year in which the contract is concluded. If you give no separate notice after winning, the contract is concluded automatically on the 4th day from the day after the award, so to cancel your participation you have to process it in the system within the deadline. The premium invoice is sent separately from your existing electricity bill, and it is paid in monthly or quarterly instalments up to the last day of that year.

Look at the strengths and the limits together

The strengths are clear. There is no upfront investment, the contract runs in one-year terms so the commitment is light, and the time from application to recognition is the shortest of the options. If you have to answer a client "within this year," this is often realistically the only choice.

It is better to start knowing the limits as well. Because green premium is an additional payment for renewable generation that has already been built, it tends to be rated low from the standpoint of additionality — whether new renewable energy was actually added. It is recognised as a formal implementation option under domestic K-RE100, but if a client applies global initiative criteria as they stand, it may also ask for other options such as a PPA or RECs. It is safer to start your first response with green premium, while checking the level of your client's requirement and preparing the next step.

Related resources

• K-RE100: Scheme Overview and Compliance Routes — comparison of the five options
• Company Registration Manual for the Renewable Energy Use Certificate — the practical work of getting the certificate issued