EU FTA to boost S. Korea's renewable energy sector: report

SEOUL, July 10 (Yonhap) -- The free trade pact with the European Union that went into effect this month is expected to fuel growth for South Korea's renewable energy industry, a report by a local think tank said Sunday.
The Institute for International Trade (IIT) said that the immediate lowering of tariffs, which reach up to 3.3 percent, will give companies in such areas as solar energy and wind power generation a clear advantage over rivals in Japan and China that have been eyeing the lucrative EU market.
The IIT, under the Korea International Trade Association, said the free trade agreement (FTA) will not only raise price competitiveness of local products in Europe, but open new opportunities in such areas as joint research and technology cooperation. Such developments will enhance overall competitiveness of local companies down the road.
The world's single largest economic bloc currently accounts for 82 percent of the world's solar energy and 51 percent of the wind generation market.
"The sheer size of the market will afford great opportunities for local businesses particularly in the wind power areas," the IIT said.
It also said that the clause in the FTA that bans European governments from asking South Korean companies to provide information on past renewable energy projects when participating in procurement project bids should make it possible to gain access to the market.
South Korean companies have recently been active in this business, although they have not accumulated enough results on past performances in the field that can be submitted for positive references.
It said local companies may do well in such areas as blades for wind power generators, tower structures and miscellaneous parts and components, with EU imports to rise in the area related to power control systems.
"South Korea has also cut tariffs, which reach up to 8.0 percent for some products, and the expected rise in imports of key systems and parts may actually benefit the overall competitiveness of wind power generators made in the country and marketed abroad," the think tank said.
It, however, said that there may be fewer benefits in terms of both export and imports for the power cell sector since it is not fully developed at present, and restructuring may take place for companies that cannot complete with lower-priced renewable energy imports.
yonngong@yna.co.kr
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