Songpa Solar Nanum Power Plant
Songpa-gu Office

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The Songpa Solar Nanum Power Plant project is the 21st innovative administration model integrating welfare and environmental policies. This is Songpa’s first presentation of the Songpa Solar Nanum Power Plant project to the world community. The Songpa Solar Nanum Power Plant is a public power plant generating energy from sunlight. Songpa donates 100% of profits from the sales of electricity to people that lack access to energy as well as to underdeveloped countries. It is being assessed as a new business and technology model integrating both environmental and welfare aspects. The plant reduces greenhouse gas emissions by solar power generation technologies. Further, the profits are dedicated to welfare work. Energy prices worldwide have dramatically increased since early 2000 due to the rise in oil prices of oil and governmental policies for reducing greenhouse gases. It has become a huge burden to people in low-income groups. Households with low incomes spend a significant amount of their income on energy. They also tend to use more energy, as they have old electrical appliances with low energy efficiency and weak insulation systems. It is estimated that there are approx. 1.2 million won households lacking access to energy and many of the individuals included in this category are the aged the disabled. It is also assumed that there are approx. 1.5 million households that lack access to energy in Korea, if the figures are arrived at considering a household which has income less than 200% of the minimum cost of living and has one or more chronically ill family members. Amongst them, only 100,000 households (8.3%) are benefited from the currently operating energy welfare projects. The government’s current energy support policy includes support for lighting costs and discounts on electricity and gas bills as a part of the national basic Livelihood security system of the Ministry of Health and Welfare. However, there is concern that this support system cannot be sustained. The subsidies are currently provided by energy providers such as Korean electric power corporation, Korea city gas association and Korea District Heating Corporation at significant strain to their financials. The subsidies may have to be revoked as financial viability drops. It is also pointed out that eligibilities of beneficiaries are not appropriately arranged. Currently, the support policy focuses on reducing the costs of gas and electricity, but 36.4% of people that lack access to energy use oil boilers. Households using kerosene or LPG are also not able to benefit from the policy. Further, households with low income or people who do not have a gauge or heating facilities at home cannot receive the energy support from the government. The above factors explain why people with low incomes or those who lack access to energy cannot benefit from the current governmental policy. Countermeasures are still not set up. Songpa attempted to solve the aforementioned issues, and working within limitations imposed by the central government’s energy welfare project, decided to promote Songpa Solar Nanum Power Plant project through establishing a cooperative system amongst local residents, experts and communities. The Songpa Solar Nanum Power Plant is driven by a community model where society ensures that at least the minimal needs of every individual are met. It strives to provide energy for cooking and heating/cooling to all human beings.

B. Strategic Approach

 2. What was the solution?
The energy issue is caused by socioeconomic problems and it needs long-term countermeasures. However, there is no legislation to promote the energy support system in Korea. Therefore, the energy support system has come up as one-off projects. To solve the energy issue, it is imperative to bring out a consistent policy that improves quality of life for the citizens instead of one-off support campaigns. In addition, a systematic power conservation policy goes a long way in reduction of greenhouse gases and improvement of energy efficiency. It is time for setting a new starting point of the policy. Especially, the local government plays a major role in bringing about changes in energy consumption and reduction of greenhouse gas emission as well as protecting the environment from global warming. Songpa has announced its intent to be ‘a leading city to act on climate change and to set out a policy focusing on conversion to renewable energy. We encourage local residents to convert to renewable energy and attempt to protect environment. We also contribute to social welfare through supporting people that lack access to energy. In February 2009, we agreed on commencement of ‘Songpa Solar Nanum Power Plant’ as suggested by the NGO, ‘Energy Peace’ while we were discussing use of alternative energy within the constraints of a welfare budget. We named it “Nanum”(the word “Nanum” in Korean means “donation”), because we wanted to emphasize its unique purpose as a power plant. The profits from sales of electricity are used to support people with low income. The purpose of this project is to produce renewable energy and support people that lack access to energy. In addition, this is a sustainable energy welfare model that would run for 15-20 years with an energy welfare fund support structure. The Songpa Solar Nanum Power Plants are operated at different venues; No.1 is in Goheung-gun, Jeollanam-do (2009), No. 2 is in Uiseong-gun, Gyeongsangbuk-do (2010), No. 3 and No. 4 are in the Resource Circulation Park of the district (2012) and No. 5 will be established in 2015. The Songpa Solar Nanum Power Plants have so far generated 8.09 million kWH of electricity. If it is divided by 3,400 kWH, which is the yearly electricity consumed by an average household in Korea, the amount of electricity to be used by 2,380 households per year is produced. As a result, 3,429t of CO2 can be reduced. Considering that one pine tree can reduce 5kg of CO2 per year, the output of the Songpa Solar Nanum Power Plant is equivalent to planting 523 pine trees. Songpa organized a support fund for people lacking access to energy with profits from the plant operation for 5 years. We have so far donated 350 million won to households lacking access to energy. We also support energy costs of electricity and gas, improvement of energy efficiency and replacement to high efficiency electric products for beneficiaries of basic livelihood support and low income households. Songpa has also started efforts to support underdeveloped countries. In September 2013, we installed a wind solar power plant in the desert of Mongolia. This is the first overseas Korean venture to improve the environment and welfare system.

 3. How did the initiative solve the problem and improve people’s lives?
This project is innovative as it actually attempts to improve energy efficiency instead of just supporting the energy costs. Furthermore, the Songpa Solar Nanum Power Plant was started under several constraints. The government’s energy support policy has not been integrated and the level of support has been low. In addition, the support was concentrated on electricity and gas, so no support was available to people that use kerosene and oil boilers. In a certain district, there was excessive support to provide briquette. We were not able to confirm whether the cash grant is actually being used for energy. When cash was provided, households with low income used the money for more urgent matters like medical fees or food. Songpa wanted to ensure the proper use of cash grants and reviewed more practical measures for energy support and improvement of energy efficiency. As part of our investigations we found that households with low income use old electricity products and it wastes more energy. This would in turn cause a higher expenditure on energy. Profits from the first Songpa Solar Nanum Power Plant have been donated as cash grants but from 2011, we have focused on replacement of the old electric products and installation of insulation to avoid the fundamental energy waste.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
In 2008, Songpa Solar Nanum Power Plant project was suggested by the NGO, ‘Energy Peace’. Songpa’s Green Governance (local residents’ association) reviewed the viability of the project through meetings. The location and capital investment were decided, followed by renewable energy certificates (REC) and the construction structures. In February 2009, Songpa took its first step towards reducing carbon footprint by setting up a public solar power plant in partnership with a NGO. Songpa also signed a joint operational agreement to the effect that, over a period of about 20 years (2009-2023), 3.5 billion won would be donated to people that lack access to energy. According to the joint statement, 25% of the net profit will be used for people that lack access to energy, 25% forwarded to underdeveloped countries and the remaining 50% will be used to build additional Solar Nanum Power Plants. In 2010, operation of No 2 Songpa Solar Nanum Power Plant (2010~2029) was promoted followed by operational agreement of No. 1. The operational profits from No. 2 were used for people that lack access to energy and to improve energy efficiency. The project will now use its proceeds to replace old electrical appliances with high efficiency products. As part of the scheme, common appliances like refrigerators and washing machines will be supplied to low-income families. Costs for setting up No. 3 Songpa Solar Nanum Power Plant (2012~2032) were shared by Songpa, a private company and the local residents. A NGO has been in charge of plant operations since 2009. The administrative council for the project is a partnership between local residents, local government, private companies and environmental groups. We have also started an initiative to pay for energy for electricity and gas defaulters. In 2013, No. 4 (2013~2033) was established by agreement amongst Songpa, a NGO and an environmental group. A project to attach insulation and replace gas timers and LP gas pipes in old housing was also started. In addition, a generator was installed in a desert of Mongolia as part of a project supporting underdeveloped countries. Mongolia does not have any electricity infrastructure, so a wind solar integrated generator (4kW in total) was installed to make use of the strengths of renewable energy. Songpa Solar Nanum Power Plant No. 5 is slated to start in the Southeast Distribution Center in Seoul and it will be completed in 2015. It was promoted by three parties’ agreement of Songpa, NGO and logistics center, and specially, this place is envisioned to be the Mecca of renewable energy and the largest building-type solar power plant facility. It can be also used as a training center to educate local residents on the benefits of renewable energy. In 2014, Songpa has started a drive called ‘Replacement to high efficiency LED lights’, and has been phasing out the production and import of light bulbs. So far 3,300 beneficiary households of basic livelihood support have received replacement LED lamps and more low income families will be benefit from this project next year. Songpa has operated four plants over the last five years for improvement of the energy welfare system. It also invests a part of its profits for installation of additional Solar Nanum Power Plants. In addition, it also attempts to improve quality of life for people that lack access to energy by enhancing the structures of energy industries.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
In February 2009, Songpa announced a ‘joint statement’ with a NGO, Energy Peach, and signed an operational agreement for the Songpa Solar Nanum Power Plant. The project is an outcome of the joint efforts of Songpa and the local communities to support people that lack access to energy and to overcome global warming issues. This is a project driven by local residents’ participation and efforts. An NGO and a company in charge of carrying out social responsibilities are in charge of installation, operation and management of each plant. The entities sell the electricity until the No.5 plant is built. Electricity output, reduction of CO2 and profits from each plant are reported to Songpa every month. The funds have been donated through a social welfare funding system until the first half of 2010, but currently the distribution is directly managed by Songpa since the ’Songpa’s ordinance on funding’ was established. Songpa selects eligible households that lack access to energy as beneficiaries to the support schemes. Social workers of 26 dong offices conduct research to identify households that urgently need support. Households with the aged, infants, pregnant women and chronic patients are preferentially selected as beneficiaries. New households are selected every year to increase the number of beneficiaries, but households requiring ongoing support will continue to benefit from the project. Songpa, a NGO and a company engaged in social welfare will distribute funds quarterly and take up other initiatives to support people lacking access to energy.
 6. How was the strategy implemented and what resources were mobilized?
10.3 billion won in total was spent until No. 5 Songpa Solar Nanum Power Plant was built and among the 10.3 billion, 2 billion won from Songpa’s budget was invested. The remaining part of the investment was raised from PF loan(project financing loan) and donation from social contribution enterprises. In addition, local residents and community groups including resident committee, local women’s society, local head officer’s board and housewives’ environmental board donated a certain amount of money for this project. The central government has not been able to promote an appropriate energy welfare policy due to budgetary constraints. Local governments, which have smaller budgets, are faced with difficulties too when promoting energy welfare policy. Songpa overcame this problem by seeking cooperation from visiting companies within the district and social welfare institutions. Environmental companies and financial investment companies provided the plants’ venue free of cost when the No. 3 ~ No. 5 plants were built and they also helped with the solar facility installation work. The operational profits of No.1 and No. 2 solar power plants were guaranteed by applying for FIT of the central government’s renewable energy support policy. This system of guaranteeing a certain minimum profit is adopted for encouraging renewable energy businesses. However, the government policy has been changed to RPS by the time the No.3 plant was established so the profit was decreased compared to No. 1 and No. 2. The profit might not be guaranteed as other competitors started to participate in the market. There were disadvantages for the Songpa Solar Nanum Power Plant in terms of prices. Despite its small size, Songpa Solar Nanum Power Plants had the advantages of contributing to the wide-spread use of renewable energy, and supporting the people that lack access to energy, thus spreading its operation every year. No. 3 was installed in the district to attract local residents’ attention, while No.1 and No. 2 plants were installed in other districts having more sunlight. Local residents have taken great interest in the plant even though the size is relatively small due to the lack of space. Local residents have donated for building No. 3 plant. The Resource Circulation Park, where No. 3 and No. 4 plants are built, is a good visiting place for kindergartens, schools, institutions and organizations.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The most important outcome has been the creation of a continuous energy welfare fund. From 2009 till now, No. 1~ No. 4 plants are operational and it is expected that an energy welfare fund of approximately 3.55 billion won will be created through sales of electricity over 30 years. In 2013, the sales of Songpa Solar Nanum Power Plant amounted to approximately 3 billion won. It has barely been operational for four years, but it already made more than 2 billion won, which is the project cost Songpa incurred. It is expected that there will be net profits of at least 7 billion won over 20 years. Songpa has generated 350 million won in total over 5 years’ operation and donated it to households that lack access to energy. This year, Songpa is supplying LED lighting supply project to 3,000 households while concurrently financing the earlier projects. Songpa is also slated to expand support to underdeveloped countries. Secondly, it established partnerships with private companies. The current energy welfare project is managed by an administration organization, but the project was promoted by a NGO, a private company and local residents. It was promoted by a joint statement and each party performed its own obligations and responsibilities. Songpa establishes infrastructure for energy welfare and supports administration and finance. Private companies also perform social responsibilities. Communities and local residents attempt to raise awareness by campaigns. This is a good example of long-term cooperation between a local government and communities as the project lasts 25 years. Thirdly, it can reduce greenhouse gas emission. The Songpa Solar Nanum Power Plants will reduce potential emission of CO2 by 22,000 tons over 25 years. It is equivalent to plating trees over a land area of 17,476,800㎡. Songpa has already achieved reduction of 3,459 tons of CO2 through Solar Nanum Power Plants. Songpa is planning to build No. 5 and No. 6 Solar Nanum Power Plants, which are expected to reduce 40% of Greenhouse gas BAU by 2020.

 8. What were the most successful outputs and why was the initiative effective?
The Songpa Solar Nanum Power Plants are operated automatically and the output can be confirmed real-time through a monitoring system. Monthly operational profits and CO2 reduction are reported to Songpa. The electricity generated from the power plants are traded according to < Electric Utility Act> through the Korea Power Exchange. Korea Power Exchange purchases the electricity based on a long-term supply agreement. The government guarantees the sales price for a certain period and accordingly, the price of electricity generated from No. 1 solar nanum power plant is guaranteed for 15 years and the price of No. 2 plant electricity is guaranteed for 20 years. The equivalent amount to the principal can be made within 12 years. After 20 years, when Songpa makes profits, it will be retained as a common operator of solar nanum power plants. In case of No. 1 and No. 2, 2.8 billion won in total was designated for donation to people that lack access to energy, utilizing the guaranteed price of electricity generated at No. 1 and No. 2. The profits acquired after 20 years will be discussed with an NGO. Once the No. 3 plant is fully operational, a supply compulsory system will be set up and it is expected to save approximately 750 million won over 20 years. A NGO will invest 100% capital for No. 5 plant, slated for completion in 2015, and operate it; a private company in the district will provide the land for building the plant. Songpa will provide support for general issues and initiate projects for people that lack access to energy. In addition, 200 million won, which is 25% of net profits, will be donated for a project to support people lacking access to energy. The net profits expected of Songpa Solar Nanum Power Plant is 8 hundred million won approximately. 25% of net profits can be spent on a project supporting people lack of access to energy is because that Songpa has had a good relationship with local people. Being a long-term project, the Songpa Solar Nanum Power Plants’ efficiency has been confirmed through Korea Energy Management Corporation’s certificate on facilities for generating energy from sunlight.

 9. What were the main obstacles encountered and how were they overcome?
Songpa adopted a solar nanum power plant integrating welfare and environmental responsibility. However, as a first time initiative in Korea, it hasn’t been easy. It was criticized that the profitability is low as the initial project cost of this long-term project was high. Generally, the initial cost is high for renewable energy projects and investment returns are higher only in the long term. In the beginning, there was a problem to secure adequate budget for the project. We visited every congressman to explain the cause and meaning of the project. Songpa Solar Nanum Power Plants have higher investment costs, but it is important as it is environmentally friendly and profitable. In addition, profitability and safety were strictly analyzed in consultation with the relevant institutions. The budget for the project was arranged jointly with a NGO and private companies donated the remaining part. In 2009, we set up . This was the first such initiative by a local government in Korea to encourage energy efficiency and energy welfare projects. In addition, we also prepared budgetary allocations for paying energy bills for people with in low income. Simultaneously, we also prepared foundations to systemize and continuously promote the government’s energy welfare project

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
One of the advantages of the project above is that it has been able to provide actual support for people that lack access to energy. The government’s current energy welfare system provides only a monthly reduction of 8,000 won on electricity bills and 10~20% discounts of gas bills every month to beneficiaries of basic livelihood support. To do this, the beneficiaries should follow procedures of application to the service providers. According to the energy basic plan announced in 2015, an energy voucher system will be adopted to support low income groups energy costs during summers and winters. With this system, electricity, gas and kerosene can be purchased at the same time. The budget has not been confirmed yet but the voucher system is more efficient as it cannot be converted to cash. It seems to be difficult that many people are benefitted due to the lack of the government’s budget. From 2009, Songpa has spent all profits from its Solar Nanum Power Plants on supporting people that lack access to energy in the district. This is the first energy welfare policy carried out by a local government. Up to 2010, 72 million won net profits were donated in cash to 240 households, including beneficiaries of basic livelihood support and low income citizens. . From 2011, the project emphasis shifted from support for energy costs to improvement of energy efficiency. 35.37 million won in total was donated and it included 24 million won cash grant to 120 low-income households and a project for improving energy efficiency. Insulation materials were attached to buildings where the disabled and infants stay, and as a result, the heating systems were improved by 15% and 61% respectively. Insulation materials were also attached to 43 old housing units. In addition, 150 million won was spent to replace refrigerators and washing machines with high efficiency products in 230 low-income households, thereby reducing the electricity costs. Electricity and gas bills of 385 households, amounting to 81 million won, were paid. In 2013, old LP gas facilities of 209 senior citizens who live alone were replaced and gas timers were installed to prevent any fire accidents. In 2014, we replaced the existing bulbs to LED lightings for 3,300 beneficiary households of basic livelihood support. Next year, the budget will be increased to 150 million won to provide benefits to more low-income households. In 2013, we donated a generator to Mongolia and the support for underdeveloped countries will be continued. The funds for this project are generated from operation of solar nanum power plants. The Songpa Solar Nanum Power Plants aim to work towards a healthy environment and a cooperative community, setting a good example of sustainable energy and welfare projects.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
The Songpa Solar Nanum Power Plant aims not only to conduct energy welfare by reduction of CO2 and saving public fund. It leads to use of renewable energy and generate public participation to address the extinction of fuels and environmental issues. Therefore, it works towards a larger goal that promotes various policies to improve quality of people’s life. In addition, a part of profits are spent on building additional solar nanum power plants. In the beginning, the costs were high and there were difficulties to secure the budget. However, it is profitable, as it is supported by the energy welfare fund guarantee for 15~20 years. A NGO, private companies, social welfare institutions and local residents actively participated in building No. 3 ~No. 5 plants and they provided human resources and the land for the project. Songpa established a governance system for cooperation of local residents, a NGO, community and private companies. Songpa promoted project this year. With this plan, we build solar power plants on rooftops of schools and donate the profits to students of low-income households. Songpa cooperates with NGOs and provides most of the administration support for supervising the operation. Approximately 2 million won of funds per year will be saved per plant and it will be donated to students. This project has received favorable reviews in Korea and overseas. Internationally, it received the bronze award from LivCom Awards, and was awarded as the winner of Sustainable City area in 2011 Globe Award. Also, it won another silver prize from the International Green Apple Awards in 2013. Domestically, it received the Green Growth Committee Leader Prize in in 2010, a ‘Ministry of Environment Department prize’ in the , as well as ‘Prime Minister and Knowledge Economy Minister prize’s in in 2012 and 2013 continuously. It can be said that Songpa Solar Nanum Power Plant has been recognized as the sustainable future environment policy to support people in poverty and as a policy that can be continued with all of the world. In addition, it was presented as a good example in hosted in Seoul in 2009. From 2013, Seoul also has been promoting a solar nanum power plant project as a part of the ‘reducing one more nuclear power plant’ campaign, and other local governments including Seongbuk-gu, Dongdaemoon-gu, Suwon-si and Pyeongtaek-si, are benchmarking our project.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
The Songpa Solar Nanum Power Plant is a leading model for energy welfare projects. Recently, the number of that people lack access to energy has increased as the energy costs for low income groups rose. Globally, people with low incomes spent more on energy comparatively. An exclusive support system is required to identify and support such people that lack access to energy. Therefore, Songpa has been operating a solar nanum power plant since 2009 and donated the profits from the sales of electricity to people lacking access to energy in Korea and other countries. The profits are also used for building additional solar nanum power plants. Plants will be operated stably as energy welfare funds will continuously be created until 2035. In addition, Songpa has established ordinances on energy and climate change countermeasures to guarantee local residents’ energy use systemically. In the meantime, there has been no legislation for energy welfare systems apart from the national basic Livelihood security system. Songpa established a good example of governance with cooperation amongst local government, local residents, NGOs and private companies. It is critical to identify each stakeholder and share the work clearly to stabilize the energy welfare support system. Currently, Korea’s energy welfare system is dominated by the central government, while local governments are now adopting it. However, Songpa took a leading role in energy welfare policy amid the central government’s limited efforts due to the lack of rights, finance, human resource and information. It also has played the role of a coordinator integrating energy welfare services systemically. Local residents have raised awareness since Songpa Solar Nanum Power Plants were known to people. Renewable energy is a safe energy modality to replace fuel energy, which is the main contributor to global warming. Many developed countries are promoting solar and wind power plant projects. Korea has started to promote renewable energy but we are still in the initial stages. Songpa Solar Nanum Power Plants are relatively small solar power plants but it has become a medium to attract people’s attention to renewable energy and environment. It is now time to expand and provide renewable energy that can be used whenever and wherever without contamination. Therefore, the support project for countries that lack access to energy has a significant meaning. 90% of land in Mongolia has become deserts and now we have made a small initiative, by installing a generator, to improve the quality of life and to support children’s education. Songpa will continue its support projects to third-world countries, which are vulnerable to climate changes, such as droughts, tornadoes and floods. It might be possible to promote energy sharing projects with global NGOs to avoid disputes between countries. Songpa is taking a leading role in raising awareness of renewable energy and supporting people that lack access to energy by promoting Solar Nanum Power Plants. We hope our Solar Nanum Power Plants will reduce poverty and protect the environment.

Contact Information

Institution Name:   Songpa-gu Office
Institution Type:   Government Department  
Contact Person:   Su Jung Kim
Title:   Public Official  
Telephone/ Fax:   82-2-2147-2444 / 82-2-2147-3863
Institution's / Project's Website:  
E-mail:   aarima@songpa.go.kr  
Address:   326, Olympic-ro, Songpa-gu, Seoul, Korea
Postal Code:   138-702
City:   Seoul
State/Province:  
Country:  

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