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It is difficult for Samsung to convert to clean energy in Korea

It is difficult for Samsung to convert to clean energy in Korea - Photo 1.

The semiconductor industry makes Samsung’s energy demand very large – Photo: BLOOMBERG

On May 20, Bloomberg News assessed that Samsung has become a symbol of Korea’s efforts to transition to clean energy.

The new administration of South Korea’s new President Yoon Suk Yeol is focusing on changing environmental policies. Observers say this is the time when Samsung needs to clearly define its emissions reduction target and lobby the government to accomplish that goal.

Some investors are especially interested in the possibility of Samsung joining RE100 – a global initiative to mobilize the world’s leading businesses to realize the goal of converting to 100% renewable energy by 2050.

Media reported that Samsung might join RE100 as early as last week, when Mr. Yoon took office. However, Samsung later said it was not ready.

According to Bloomberg, fossil fuels contribute more than 60% of Korea’s total electricity in 2020.

According to the environmental consultancy Ember, developing the semiconductor materials industry requires a lot of energy, and Samsung’s electricity consumption is already 20% higher than the total amount of wind and solar energy in Korea in 2020.

Ember notes that Samsung is looking to achieve its goal of 100% clean energy even in areas where renewable energy is scarce.

“Samsung’s failure to commit will be worrisome as this will not only affect its profits in the long run, but also affect South Korea’s economic growth because of the country’s position and influence. “, Ms. Park Yoo Kyung – an expert at APG Investment Management Company (Hong Kong) – warned.

Even if Samsung makes a commitment to clean energy transition in Korea in the next few months, analysts still say that the change process is unlikely to happen quickly and make a significant impact.

While the price of renewable energy in Europe, China or the US is quite affordable thanks to the wide supply, the price of this type of energy in Korea is still higher than fossil fuels. The reason is that the country lacks land for wind and solar power, forcing clean energy developers to adopt more expensive technologies.

Experts say an effective way to make change is for Seoul to have more subsidies and tax incentives for long-term power purchase agreements (PPAs) for renewable energy.

These PPAs will help focus investments on solar power projects, protect power consumers like Samsung from price fluctuations, and enable them to better commit to their goal of transitioning to clean energy.

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