Corruption in solar power projects has been uncovered by the state auditor.
According to the Board of Audit and Inspection on Thursday, 57 employees of Korea Electric Power Corp. were engaged in irregularities related to solar power projects between 2014 and 2016.
The employees in question operated solar power plants under the names of their spouses or children.
The capacity of solar power connectible to the grid is restricted differently by region, but they were bribed by contractors to allow them extra licenses to connect solar power stations to the grid. Some of these licenses were then bought by the employees’ close family members.
The audit findings indicate that the solar power projects mushrooming across the country are vulnerable to shady dealing between Kepco and private businesses. The government must tighten its oversight of these operations.
The irregularities detected this time may be the tip of the iceberg, considering the board inspected solar projects implemented from 2014 to 2016.
Last year, the Moon Jae-in administration vowed to ensure a fifth of the country’s total electricity came from renewable sources by 2030, up from 7 percent in 2016. To meet that goal, it plans to spend 110 trillion won ($116 billion) by 2030.
The plans accelerated the already existing solar power boom.
In rural areas, solar project brokers reportedly urge farmers to apply to reallocate their farmland to solar power production.
Brokers draw investment in solar plants by touting higher returns than regular investments. Rumors once circulated that once a solar power station was installed at a cost of 200 million won, it would bring a monthly return of 2 million won in proceeds from selling power to Kepco. These relatively high returns are the result of state subsidies.
Seoul is no exception.
Seoul Mayor Park Won-soon announced plans to spend 1.7 trillion won by 2022 to increase solar power generation.
Last October when lawmakers inspected Seoul Metropolitan Government, suspicions of irregularities were raised about a little known cooperative winning projects to install solar panels in the capital.
Seoul Housing & Communities Corporation, a public enterprise fully owned by the Seoul Metropolitan Government, awarded solar projects to the cooperative, which was founded by a left-wing civic group.
The cooperative reportedly went further to press Kepco not to participate in bids for school solar power projects. Kepco eventually withdrew from competition.
The country has about 25,000 properties that supply solar power, most of them set up in recent years. About 90 percent of them are sub-100 kilowatt photovoltaic stations.
The number will keep rising under the drive to reduce coal use, shut down all nuclear power plants and increase the adoption of solar and other renewable energies.
If the government fails to take control of the large number of new solar projects taking place across the country, the market will likely descend into pandemonium.
The central and provincial governments must take strong measures for a fair and transparent implementation of solar projects. A full investigation of Kepco is needed as well.
Corruption in solar power projects stems largely from generous state subsidies that are used to buy power from solar plants.
The Moon government earmarked 66.9 trillion won in state subsidies this year, 2.2 times as much as 30 trillion won in 2006. State subsidies will be given in diverse fields, including agriculture, research and development, education, culture, sports, welfare, and small and medium-sized enterprises. There are as many as 1,347 subsidized projects for small and mid-sized enterprises alone.
Subsidy-related corruption is a perennial problem, because the government subsidizes too many projects for it to supervise them all closely. And yet the number keeps rising. Projects are likely to exploit blind spots in state oversight if they are small in size and many in number.
The best way to prevent cozy ties between public entities and private businesses is to cut down on the number of subsidized projects.
While raising project transparency and oversight, the government also needs to review whether it is pushing too hard to raise renewable energy provision to 20 percent by 2030.