Only 3 out of 10 companies promoting ‘fossil fuel → electricity’… “We need to reduce the cost burden”

As companies are unable to speed up their electrification efforts due to high investment costs, there are claims that electricity procurement costs should be reduced through incentives.

According to the 'Survey of Corporate Electrification Status and Policy Tasks' conducted by the Korea Chamber of Commerce and Industry (KCCI) on 307 of the top 1,000 companies in sales on the 8th, 31.9% of companies are pursuing electrification. Companies without plans reached 62.9%.

More than half of companies pursuing electrification (42.0% ‘somewhat large’, 14.8% ‘very large’) responded that they feel burdened.

The burden factors were found to be ▲ high initial investment cost (84.0%) ▲ high operating cost (56.2%) ▲ policy uncertainty (18.5%).

Incentives to reduce the burden of electricity procurement costs were cited as the most necessary policy for electrification (66.1%). This was followed by ▲ rate and market system improvement (61.9%) ▲ improvement of energy policy predictability (45.0%) ▲ technology development and human resources training (23.1%).

In a report commissioned by the Korea Chamber of Commerce and Industry along with this survey, Jeong Yeon-je, a professor at Seoul National University of Science and Technology, said, "To accelerate electrification, which replaces fossil fuels with electricity, the burden of power procurement costs on companies must be eased," and added, "Like major countries, there is a need to establish a support system that utilizes government funds to help electrification."

In the United States, some states and power companies are providing rate incentives, such as the Texas power company applying low electricity rates to companies that use renewable energy.

China is exempting energy-intensive companies with high energy efficiency from surcharges, and Germany is subsidizing the difference in electricity bills on the premise of green investment.

Cho Young-jun, head of the Sustainability Management Institute of the Korea Chamber of Commerce and Industry, said, "Electrification of companies is still in its early stages, and the speed of expansion will vary greatly depending on how the support system is in place."