Background of Research
Final energy consumption in Korea has shown a tendency of growing at an annual growth rate of 2.7% from 2000 to 2013. Fossil energy consumption for farming and daily life in the rural community has been also increasing. The main source of energy needed to produce agricultural products in the agricultural sector is petroleum. The recent increase of the international oil prices has resulted in the increase in agricultural production costs, increasing the concerns for reduction of agricultural production.
Petroleum is the main energy source in the rural community but its relatively high price is negatively affecting the quality of rural residents’ life. In addition, though rural residents wish to use LNG because of its relatively low prices, it is not easy to have LNG supply due to such realistic problems as pipe network installation.
Therefore, as a means for enhancing the competitiveness of agriculture and rural communities, policies to save energy and to expand the use of renewable energy should be sought.

Method of Research
In this study, in order to understand the current conditions of energy production and utilization in the agricultural sector, the following data were analyzed: Nong Hyup (NH)’s data about tax-free oil for agriculture, KEPCO data on electricity use for farming, Rural Development Administration (RDA)’s basic raw data about 283 crops, Statistics Korea’s baseline data about six items, other related agencies’ statistical data, government policy data, and other relevant articles. Also, an expert forum was held to draw policy measures, in which the experts from each sector, such as NH staff in charge of tax-free oil, Korea Energy Economics Institute (KEEI) staff specialized in electricity for agricultural use, university professors (specialized in the enforcement guidelines for the projects by the Ministry of Agriculture, Forestry and Fisheries) and RDA staff in charge of energy, identified challenges and derived improvement measures.
In the rural life energy sector, rural household survey data and energy census data were analyzed to identify the current conditions of energy consumption in rural and urban communities. On the other hand, the renewable energy policies for agriculture and rural community were examined through commissioning of an article.

Research Results and Implications
Korean energy policies can be divided into energy saving policies and renewable energy expansion policies, and the energy policies in the agricultural sector focus on efficient energy utilization for farming, which is divided into renewable energy expansion and energy-saving facility expansion. The renewable energy used in agriculture includes geothermal heat pumps, wood pellet, and air heat pumps, which are mainly distributed to the controlled farming households.
According to the results of analyzing the effects of renewable energy supply to farming households, the renewable energy has such positive effects as reduced heating costs and increased yields per unit area. However, it was also found that renewable energy sources like geothermal energy and air heat have such negative effects as high initial installation costs and frequent needs for maintenance and repair.
On the other hand, such energy-saving facilities as multi-ply insulation curtains, water-screen facilities and exhaust heat recovery devices have been supplied to the controlled farming households. Research results show that farmers have saved the heating costs by 30~40% via using the energy-saving facilities. In the meantime, by making the support for energy-saving facilities into a package, taking into account facility size, facility type, crops and area, it is possible to reduce administrative costs and the time and costs for farmers’ application.
Energy policies related to the rural life are about low-cost energy supply and renewable energy supply, which are divided into regional policies and individual household policies. The representative of the regional policies is to expand LNG supply. When LNG is supplied to rural areas, their heating costs can be significantly reduced. Compared to the nationwide LNG supply rate of 76.4%, the LNG supply rate in rural areas is as low as 28.3%.
An example of the individual household policies is the Million Green Home Project, which is expected to cost 6.5 million won per house with government funding. According to the study, success of the Million Green Home Project requires a policy to expand the supply of technically stable equipment with low maintenance costs.
On the other hand, other countries have mostly implemented Feed-In Tariff (FIT) as their energy policy, and the Renewable Portfolio Standard (RPS) is also implemented in parallel with the FIT. Especially, Japan, which has a similar environment to Korea, has regressed to the FIT system by improving the problems of the RPS system. Compared to the overseas cases, it seems to be desirable for Korea to implement the advantages of the RPS and FIT in parallel.
Lastly, it is urgent for the agricultural rural sector to establish and implement energy management plans that can expand the development and supply of renewable energies existing in the region and the supply of energy-saving facilities, keeping pace with the national energy policies.


Researchers: Kim Yean-jung, Park Si-hyun, Han Hye-sung,
Park Young-gu
Research Period: 2014. 1. ～ 2014. 12.
E-mail address: yjkim@krei.re.kr