POSCO is reworking how it procures renewable energy. A plan to expand investment in renewable power generation inside its steelworks is under review. According to the industry on the 13th, a plan to sign long-term power purchase agreements (PPAs) with outside renewable energy developers is also being discussed. On the same day, a proposal to extend PPA eligibility to fossil-fuel LNG power generation also surfaced.
Growing demand lies behind manufacturers' moves to buy electricity directly. In a survey by the Federation of Korean Industries (FKI), new businesses at Korea's top 1,000 companies were concentrated in energy, robotics and AI. The FKI cited 'rising demand for renewable energy procurement' as the reason renewable energy made up a large share of new businesses. As more companies sought clean electricity to run their factories, producing that electricity itself became a new business.
The government has also finalized its 2035 Nationally Determined Contribution (NDC) for greenhouse gas reduction and announced a plan to build RE100 industrial complexes.
Results for global big tech companies are mixed. Microsoft achieved RE100 in 2025. The company said it would widen its scope to carbon-free energy as the next step. Meta recently lost its RE100 membership status.
PPAs are a system introduced to expand renewable energy. The circumstances of those who want to add LNG power generation are also worth considering. Companies may find it difficult to power factories that run nonstop using only sources whose output varies with the weather.
However, LNG electricity is fossil fuel electricity even when it is bought through a PPA. If long-term contract demand that would go to renewable energy developers shifts to gas-fired generation, it runs counter to the purpose for which the system was introduced.
There is a precedent to consult when deciding how far to extend eligible power sources. Large hydropower is a centrally dispatched generation source and is also classified as renewable energy. When setting the criteria, what should be considered is the energy source rather than the mode of operation. By energy source, LNG does not qualify as renewable energy.
Now that the government has gone as far as unveiling RE100 industrial complexes, opening the door of PPAs to fossil fuels would give companies an incentive to take the easy path. Conversely, if the procedures and requirements for renewable energy PPAs are revised, long-term contracts from large manufacturers such as POSCO could lead to the construction of new power plants. Clarifying now which power sources are eligible for PPAs can preserve the momentum of the transition.
If you work at a company, open your company's sustainability report today. Check whether it states, next to the share of renewable energy used, what kind of contract was used to obtain that electricity. If it does not, posting a single question on the company bulletin board is enough.
