President Moon proposes shift to green energy
SEOUL A proposed energy U-turn by South Korea's new government would put the environment at the centre of energy policy, shifting one of the world's staunchest supporters of coal and nuclear power towards natural gas and renewables.
If implemented, the ambitious plans by the world's fourth biggest coal importer and No. 2 liquefied natural gas (LNG) buyer will have a big impact on producers. South Korea's LNG imports could jump by more than 50 per cent by 2030, while coal shipments could peak as early as next year.
But experts warn that any move to halt construction of a raft of new coal and nuclear plants, many of which are already being built, could threaten energy security, spark claims for massive compensation and push up electricity prices.
The plan by the new administration of left-leaning President Moon Jae In, who took power early last month, would move a notable laggard in renewables towards green energy, responding to public concerns over air pollution and nuclear safety.
"The government can't neglect people's demands, and in the long term, it's right to pursue clean and safe energy. But there will be many challenges," said Mr Sonn Yang Hoon, Economics Professor at Incheon National University.
South Korea, Asia's fourth-largest economy, gets 70 per cent of its electricity from thermal coal and nuclear reactors, and offers tax benefits to both sectors to ensure abundant electricity at affordable prices.
While Mr Moon's energy roadmap is still being hashed out, his staff say that care for the environment will play a central role in forming policy.
"Currently taxes are imposed on gas for power generation, and we plan to correct the skewed tax system by seeking to levy environmental taxes on coal and nuclear," said Dr Paik Ungyu, an energy engineering professor at Hanyang University who advises Mr Moon on energy policy.
The government hopes to boost gas-fired generation from about 18 per cent now to 27 per cent by 2030 and boost the use of renewables, now mainly hydro, from roughly 5 per cent to 20 per cent, said Dr Paik.
Mr Moon this month ordered a temporary halt on 10 old coal-fired power plants and outlined plans to bring forward their permanent closure.
More controversially, he pledged during his campaign to review existing plans to build nine coal power plants and eight nuclear reactors, including the part-completed Shin Kori No. 5 and No. 6, citing safety concerns.
Experts estimate up to US$2.7 billion (S$3.7 billion) has already been committed on Shin Kori No. 5 and No. 6 by state-run Korea Hydro & Nuclear Power Corp. Work has also started on the coal plant projects, although all are less than 10 per cent complete.
If forecasts suggest that not building the new plants means South Korea will be unable to meet projected electricity demand, then the government's pledges won't be feasible, said Mr Kim Nam Il, senior research fellow at the Korea Energy Economic Institute.