Amorepacific Signs Korea’s First Virtual Power Purchase Agreement with Local Wind Power Company in Jeju

Amorepacific signed Korea’s first virtual power purchase agreement (VPPA) with Bukchon Seomo Wind Power, a wind power plant located in Bukchon-ri, Jeju. 

 

The deal marks the first achievement following the “Agreement on the Private-Public Cooperation for the Establishment of Jeju-style RE100 Trading Market System” signed at the Jeju Provincial Office on Nov. 14.

 

A VPPA is a method of supplying renewable energy, which is generally implemented in the US and the European market. Amorepacific and Bukchon Seomo Wind Power became the first pair of companies to sign a VPPA in Korea, through which Amorepacific will be able to secure 3MW of wind power-generated energy for approximately 17 years until 2040. Taking into account the circumstances and the price uncertainty in the Korean wind power transaction market, the terms of the agreement include ensuring a fixed income source for the village by settling the difference between the wholesale price of electricity and the fixed price every month.

 

With the renewable energy certificate obtained through the agreement, Amorepacific can convert to renewable energy for its buildings and business sites, such as headquarters and sales offices across the nation. Considering the complex and unprecedented transaction structure, SK E&S, which was responsible for structuring the agreement, will be taking part as a mediator to provide transaction stability during the period of the agreement.

 

Amorepacific is focusing on securing clean energy sources to convert 100% of its electricity demand at all business sites to renewable energy by 2025. As part of this goal, the company built additional 1.5GW-capacity solar power facilities and concluded Korea’s first direct solar power PPA contract and a third-party PPA contract with KEPCO in March and June, respectively. Amorepacific is the only company to apply most of the methodologies available in Korea to secure renewable energy by expanding its use through a three-time purchase of green premium electricity beginning in 2021.

 

“This VPPA contract is significant in that it is a stepping stone towards keeping our promise of manufacturing and selling products with 100% renewable energy,” said Amorepacific’s President Lee Dong-soon said. “We hope that our customers can relate to our sincere commitment towards making the conversion to renewable energy in light of the climate crisis. In addition, we seek to contribute to the Jeju Carbon-Free Island 2030 Initiative through continuous cooperation with the local community.”