[Editorial] Green pandemonium

The previous administration under President Moon Jae-in pushed an unreasonable nuclear phase-out policy and expanded renewable energy hastily. Irregularities suspected of being committed under the pretext of environment-friendliness are now coming into light.

According to Yun Chang-hyun, a National Assembly member of the ruling People Power Party, the Office for Government Policy Coordination of Prime Minister’s Secretariat under the Moon administration probed solar and other power generation projects run by eight local governments and three public enterprises in the March and April of 2018 and found 54 cases of illegality. Budget waste amounted to 5.7 billion won ($4 million). But it neither disclosed the probe results nor expanded the investigation nationwide.

The result was terrible.

The office under the current administration sampled 12 out of the 226 local governments and investigated the solar projects they supported. It found 2,200 cases of illegality that amounted to 260 billion won.

Illegal acts and their costs snowballed as a consequence of the Moon administration’s excessive push for renewable energy. The office started the operation of a pangovernmental task force last week to investigate all of the solar projects supported by local governments. Given the small sample investigated, solar project irregularities exposed to date are likely to be the tip of the iceberg.

The Seoul Metropolitan Government also inspected solar projects that the city supported under previous Mayor Park Won-soon, and found scores of firms in violation of related regulations.

When he was president, Moon showed a special interest in the Saemangeum Offshore Wind Farm, an offshore wind power project by the reclaimed tidal land on the southwest coast in North Jeolla Province. Part of the farm is reportedly set to be sold off to a Chinese company. This is embarrassing news.

According to data obtained by Park Soo-young, a People Power Party lawmaker, from the Ministry of Trade, Industry and Energy, a special purpose company established by a professor of a national university to run an offshore wind farm in Saemangeum made a deal to sell business rights to a Chinese company.

The special purpose company agreed to sell off a large part of its equity to a Thai company for $50 million. The buyer's parent company is reportedly a Chinese company, whose chief executive is a Chinese national who manages the Korea branch of a Chinese state-run energy group.

Most solar equipment in Korea are made in China. The inflow of Chinese funds into Korea’s wind power projects as well is concerning.

The special purpose company is capitalized merely at 10 million won. If the equity sale is completed, the sales amount will be 7,000 times as large as the capital. The ministry has not yet given the final approval on the deal.

The Saemangeum solar and wind power project was started up in October 2018 as President Moon declared that his government would create a mega cluster of renewable energy facilities in Seamangeum at a cost of trillions of won from the private sector, state and local government budgets.

The professor is said to have taken the lead in the country’s development of offshore wind power generation under the Moon administration. Conflict of interests are suspected. The government needs to check carefully if wind projects were abused as well like solar ones as a private money-spinner.

The Financial Supervisory Service estimated the total amount of solar-related government aid, financial-sector loans and private equity funds under the Moon administration at 26.5 trillion won. This is a tremendous amount.

From early on in the previous administration, solar and wind projects created a frenzy of pro-Moon activists seeking benefits from the government’s rush to increase renewable energy supply.

It is tax theft to receive government aid illegally behind the veil of green projects. A thorough investigation and inspection are needed.