Pushing the low carbon boundaries: South Korea's smart grid initiative

Workers install a solar panel on a household within the Jeju Smart Grid project site. More than 2,000 homes along Jeju’s northeastern coast have been connected to the test grid. SK Telecom Consortium

South Korea's economic transformation over the past 40 years is remarkable when considering that this country of 50 million has few natural resources. Its export-driven economy evolved from the garment industry to shipbuilding and now information technology, yet the country has always imported almost all of its fuel. Its vulnerability to spikes in energy prices has long preoccupied business and government leaders.

One step towards increased energy independence has been South Korea's drive to become a leader in smart grid research and development. That work has transformed an agrarian island into a hub of innovation and experimentation.

For decades Jeju island, 50 miles (80km) off southwestern South Korea's shore, was known as the country's honeymoon and holiday destination. But now several of South Korea's leading chaebol (business conglomerates) and government agencies have launched the Jeju Smart Grid Roadmap.

The project started with a 64.5 billion won (£36 million) government investment to test real-time grid monitoring, digital power transmission, and digitally operated power distribution systems. That investment will quadruple by the end of the project in 2013. While South Koreans and foreigners have long complained about the chaebol's outsized influence on the country's economy and politics, the cost of developing smart grid technologies is too expensive for smaller start-up firms alone. More than 160 companies, large and small, are involved with the four-year-long Jeju experiment.

SK Telecom is one chaebol leading the national smart grid project. Paul Kim, one of SK Telecom's smart grid managers, explained in detail South Korea's investment in smart grid technologies, which includes smart appliances, electronic vehicle charging, and micro-grids for renewable energy.

Korea's Smart Grid Roadmap has five core components: smart power grid, smart transport, smart renewables, smart electricity, and smart places. SK Telecom has led the smart places core with its "Test Bed," a programme that has taken modest stucco homes in Jeju's countryside and transformed them into the homes of the future.

More than 2,000 have been revamped with solar panels on the roofs. Smart meters and energy storage batteries integrate televisions, refrigerators, washing machines, and air-conditioning units. Tablet computers allow homeowners, many of them farmers, to monitor and adjust their household energy consumption. Power is adjusted according to peak demand and outside temperatures, and local utilities reflect that in the price. "All the appliances are interconnected with one another," said Kim. "The power-saving mode is in place in accordance with real-time pricing."

For SK Telecom, the capital and human resources necessary to support this project should pay off in the long run. SK's Smart Places Test-Bed focuses only on homes at the moment but SK Telecom has developed the Network Operation Centre Building Energy Management System, a smart grid system that can be scaled up for commercial use. Cloud software will manage both large clusters of buildings as well as an organisation's properties dispersed across a wide region.

The technology is still in its infancy, and the final analysis of the Jeju project, which finishes in May 2013, will determine how the chaebol and the South Korean government pursue the smart grid, said Kim. Despite public service announcements touting smart grid's potential, he said that public awareness was still thin. That could change with a more cost-effective smart grid technology and rising fossil fuel prices.