Profile of
The Korea Energy Management Corporation (KEMCO)

Objectives
The Korea Energy Management Corporation (KEMCO) is a non-profit government agency in charge of implementing energy efficiency & conservation policies and programs. Its primary function is the energy management aiming at environmentally-friendly, socio-economic structure.

Activities
KEMCO's major activities are:

• Implementation of energy-saving programs by sector of energy use;

• Energy audits & surveys;

• Promotion of energy efficiency;

• Commercialization and diffusion of higher-efficient energy appliances;

• R&D, demonstration and dissemination of technologies on energy and mineral resources; and

• Climate change mitigation efforts.

Voluntary Agreement (VA)

• The Voluntary Agreement, is a joint program between the Government and industry, which is managed by the Ministry of Commerce, Industry and Energy (MOCIE) and the Ministry of Environment.

• A company which intends to join the agreement should submit a concrete action plan within three months after submitting to KEMCO a letter of intent, specifying energy consumption and greenhouse gas emission reduction target.

• The action plan must contain operating organization, energy efficiency enhancement target, greenhouse gas (GHG) emission reduction target and detailed process design. After the evaluation of the action plan by KEMCO, the qualified company and KEMCO conclude the VA contract.

• The company which has joined the agreement will be supported with low interest loan and tax incentive for energy conservation and greenhouse gas reduction. Technological support as well as PR promotion for the company will be offered. <return to top>

Energy Service Companies (ESCOs)

• ESCO business was introduced in Republic of Korea to convert a formerly government-led energy conservation program into a private company-led energy conservation based on their creativity and voluntary action.

• ESCO operations include maintenance service utilizing energy conservation facilities, business related to energy-efficient facility investment, and energy conservation including energy management monitoring.

• The ESCO project started with three registered companies. Its number rose to 108 in the year 2000. The major operations of these companies are high efficiency lighting, power production by new and renewable sources of energy (NRSE) and waste heat utilization.

• ESCO carries the entire financial burden necessary for facility investment and provides professional service for energy conservation facility and tax incentives for ESCO customer companies. The return of the initial investment will be made by the energy conservation incurred by the investment in the future.
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Energy Audits

• Energy audits in Republic of Korea have been conducted mainly by KEMCO. KEMCO has different types of energy audit programs in industries, commercial buildings, and transportation respectively.

• In the industrial sector, there are two kinds of energy audits, namely in-depth audit and free audit. The in-depth audits or technical service audits are generally conducted at the request of the users, while free audits are offered for small and medium-sized industrial firms whose annual energy consumption is 250 to 5,000 TOE or 1 to 30 million kWh.

• In the commercial building sector, the energy audits are conducted for a fee for large residential and commercial buildings at the request of those buildings. Free energy audits are offered for governmental and public buildings. Depending on the results of the audits, technical assistance and energy efficiency actions, such as thermal insulation and double-glazed windows, are provided.

• In the transportation sector, energy audits are offered to companies that own more than 50 vehicles to improve their automotive economy. Currently, there are approximately 1,400 companies that belong to this classification which is designated as energy-intensive by KEMCO. After the audit, they are provided with recommendations about the identified energy waste factors, together with technical guidance for efficient management of automobile energy. <return to top>

Promotion of High-Efficiency Equipment

• Energy Efficiency Standards & Labeling Program
  
  KEMCO launched the "Energy Efficiency Standards & Labeling Program" in 1992 to eliminate inefficient designs from the market and help consumers choose more energy-efficient goods through the labels attached on products, which grade the energy efficiency from 1 to 5. This program covers electric refrigerators, electric air-conditioners, incandescent bulbs, fluorescent lamps,  and self-ballasted lamps, as well as ballasts for fluorescent lamps and passenger cars. It is applied both to domestic products and imported products.
  

• Energy Efficiency Standards
  
  Energy efficiency standards are regrouped into "Minimum Energy Performance Standards" and "Target Energy Performance Standards". Minimum Energy Performance Standards were designed to rid the market of inefficient products. The products that fail to meet minimum standards are prohibited from being produced and sold. Any violator will be fined. Target energy performance standards aim to encourage manufacturers to improve the energy efficiency of their products to a technically feasible and economically acceptable level.
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• Energy Efficiency Rating Labeling Program
  
  The objective of this program is to induce manufacturers to consistently make products with higher efficiency and stimulate importers to introduce more energy-efficient products into the local market, while helping consumers choose more energy-efficient goods.
  
  KEMCO is authorized to monitor whether the manufacturers or importers of appliances with energy efficiency rating label observe this program or not. In particular, KEMCO carries out market-place inspection and product inspection. KEMCO inspects the market to ensure that all products covered by the law are correctly labeled and the labels accurately reflect the products' energy efficiency. Product inspection is carried out to check whether testing results agree with reported efficiency and rating by the manufacturers or importers through random sampling test. <return to top>
  

• Energy-saving Office Equipment and Home Electronics Program
  
  This program, started in April 1999, is a voluntary partnership between the manufacturers and KEMCO, representing the Korean government. The objective of this program is to induce manufacturers to voluntarily produce energy-saving products to meet the energy-efficiency guidelines proposed by KEMCO. Manufacturers producing such items as computer, monitor, printer, fax machine, copier, TV and VCR can attach an energy-saving label on their products certified as energy-saving products by KEMCO. <return to top>
  

• Certification of High Energy Efficiency Appliances Program
  
  This program, started in December 1996, is to certify as a "High Efficiency Energy-using Appliance" any energy-using product which has much higher energy efficiency than similar products. To increase the proportion of energy-efficient appliances in the market, the Government provides long-term and low interest loans to certified companies. 
  
  KEMCO perfoms random tests to monitor energy efficiency of the certified products. The manufacturer or importer of the product which fails the test is given a second chance. Should it fail again, the public is notified that the product's ceritification has been cancelled.
  
  Government-related organizations are recommended to use the certified appliances. The recommendation may be raised to the status of obligatory regulation in the near future. <return to top>

Regional Energy Program

• The Regional Energy Program supports various activities to stabilize demand and supply as well as the rationalization of energy by local government in the region.

• MOCIE provides local governments with subsidies to effectively implement the regional energy program. KEMCO provides technological consulting, information service and education & training courses for the public servants in charge of regional energy program in the local governments.

• The Regional Energy Program consists of two sub-programs:
  a) The Infra Build-up Program such as the establishment of regional energy planning, the feasibility study of unused and/or new renewable energy sources in the region, public relations and education about energy conservation, and so on; and
  b) The Demo Project to invest in the facilities of energy conservation or the utilization of unused and/or new renewable energy. <return to top>

Financial Assistance to Energy Efficiency Investment

• Investment in energy-saving facilities or energy technologies research and development entails great expense, which is a practical burden for manufacturers. Also, small and medium enterprises may have inadequate access to normal banking channels. The preferential long-term loans and/or various tax incentives provided by the Government may encourage voluntary participation in energy efficiency and conservation investments.

• The Government has provided long-term and low interest rate loans in the form of the "Fund for the Rational Use of Energy" and tax incentives for energy efficiency and conservation investments. KEMCO manages and monitors the Fund which KEMCO receives from the Government at the beginning of each year. <return to top>

Ten-year National Plan for Energy Technology Development

• Goals
  
  The government has established the "Ten-year National Plan for Energy Technology Development (1997-2006)" which incorporates three energy technology plans: a) energy conservation; b) new and renewable energy (N&RE); and 3) clean energy. The main goals of the plan are to reduce 10 per cent of the total national energy consumption in 2006, and to supply 2 per cent of the total national energy with new & renewable energy in 2006.
  

• Basic goals of the Plan are to:
  
  a) establish goals for energy technology, considering present 
  technological levels, availability of funds, and the likelihood of utilization;
  b) designate priority R&D areas, and formulate competitive R&D 
  management systems by adopting  "top-down" R&D process;
  c) expand R&D infrastructure programs;
  d) promote early commercialization and dissemination; and
  e) create an effective R&D promotion system for better efficiency.
  

• High-priority technologies are selected by the following criteria:
  
  a) A technology which has high potential to improve energy conservation and the energy supply & demand status as well as reduce environmental pollution;
  b) A technology which the private sector finds difficult to develop due to lack of economic feasibility and which should therefore be initiated by the Government.
  
  KEMCO has organized Technical Expert Research Groups for the coordination and management of high-priority R&D programs.
  

• Other technologies are classified into General Programs to promote continued development of the technology and commercialize them within a short period of time.
  

• New and Renewable Energy Demonstration Program
  
  KEMCO supports several N&RE demonstration projects for public organizations in order to attract public attention and to assure the credibility of R&D activities. To expand the N&RE market, the Government supports low-interest bank loans for N&RE producers and facilities. Loans are provided at 5.5 per cent interest up to 90 per cent of the total investment.
  

• Energy Technology Demonstration Projects
  
  These projects develop technologies which are disseminating sluggishly due to high business risks and low cost-effectiveness despite promising outcomes predicted by research. KEMCO promotes those projects to assure their reliability and enhance their economic feasibility by demonstrating developed technologies on-site. <return to top>

Climate Change Mitigation

• The Government has led the Republic of Korea in dealing with climate change. In order to formulate and implement measures to deal with the Framework Convention on Climate Change (FCCC), an inter-ministerial Committee on the FCCC, comprised of related government agencies, research institutions and private companies, was established in April 1998 with the Prime Minister as the head of the committee. In December 1998, comprehensive measures to cope with the FCCC were formulated, and have since been promoted.

• After the Rio Conference, energy-saving efforts of the Government have been further strengthened. The Government amended the Rational Energy Utilization Act, in January 1999, for CO₂ reduction by coordinating domestic energy conservation projects with the global environmental issue.

• KEMCO established the Center for Climate Change Mitigation Projects (CCCMP) in the beginning of 1999 to coordinate actions between the public and private sectors in the energy field. CCCMP supports actions to reduce GHG emissions as well as efforts to increase understanding of their impacts, building up the foundation of the Protocol's implementation and various implementation options open to Republic of Korea. <return to top>

Green Energy Family Movement

• The Green Energy Family (GEF) Movement was initiated in 1995 to address global environmental problems by enhancing energy efficiency through diffusion of energy-efficient facilities in Republic of Korea. GEF is a partnership of citizens, companies, NGOs and the mass media.

• GEF is a nationwide voluntary and cooperative economic movement to enhance energy efficiency and reduce social costs through energy conservation and CO₂ reduction. By participating in GEF, companies can reduce energy costs, energy providers can lessen the burden of expanding energy supply capacity, NGOs can contribute to energy conservation and enhance their reputation, and KEMCO can guide technological development with low cost while also informing people of the importance of energy efficiency.

• Energy conservation is not a simple problem involving only cost reduction. It should be perceived as the environmental moral standard of society. GEF was initiated by KEMCO attain sustainable development through the actions of harmonizing energy, economy and the environment (the 3Es). <return to top>

Key Persons
Kim Hong-Kyung, President
Seoh Joo-Sok, Standing Auditor
Hong Yoon-Ho, Executive Vice President
Lee Myung-Yong, Executive Director
Kim Yong-Duck, Executive Director
Koh Yoo-Jin, Executive Director

Contact Info
Address : 1157, Pungdukchun-ri, Suji-eup, Yongin-si, Kyonggi 449-994, Republic of Korea
Phone : (82)(31) 260-4555 to 9
Fax : (82)(31) 260-4549
E-mail : webmaster@kemco.or.kr
URL : http://www.kemco.or.kr/

Number of Staff
451 persons

Strategic Partners
UNDP, JICA, GTZ, SKAT, ENTEC, TEPSCO, KANDENKO, EL PUENTE, XFAM, TEPCO, and YAKASAN MANDIRI

Legal Notice
Established in 1980 by the Ministry of Commerce, Industry and Energy under the legal basis of the "Rational Energy Utilization Act".

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