A proposed energy U-turn by South Korea’s new government would put the environment at the center of energy policy, shifting one of the world’s staunchest supporters of coal and nuclear power toward 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 percent 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 which took power in early May would move a notable laggard in renewables toward 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 Sonn Yang-Hoon, Economics Professor at Incheon National University.
South Korea, Asia’s fourth-largest economy, gets 70 percent of its electricity from thermal coal and nuclear reactors, and offers tax benefits to both sectors to ensure abundant electricity at affordable prices.
While 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 Paik Ungyu, an energy engineering professor at Hanyang University who advises Moon on energy policy.
The government hopes to boost gas-fired generation from about 18 percent now to 27 percent by 2030 and boost the use of renewables, now mainly hydro, from roughly 5 percent to 20 percent, said Paik.
