By John Burton
While President Moon Jae-in has been praised for his handling of the COVID-19 outbreak, his efforts to address another global issue ― climate change ― appear to be sputtering.
In the launch of his Green New Deal this year. Moon repeated his promise first made in 2017 that non-hydro renewables would provide 60 gigawatts (GW) of energy, accounting for about a fifth of total energy production, by the end of the decade.
But there is increased skepticism around whether Korea's ability will reach that target. Renewables now account for only 4 percent of electricity generation in Korea compared to 10 percent in the U.S., according to the BP Statistical Review of World Energy 2019.
Fitch Solutions, a financial research group, estimates that renewables will only generate 31.9GW by 2029 because it will be more expensive than alternative energy sources, such as nuclear or fossil fuels, and thus will be economically unviable without sufficient subsidies despite the falling costs of solar and wind energy.
Pressure is growing on the government to deal with climate change. The National Assembly has passed a "climate emergency" resolution calling for a net zero emissions target by 2050. The government has responded by saying it will spend $64 billion over the next five years on the capacity of renewables and the development of "smart green cities."
But the government so far has failed to address some other issues. Korea's mountainous terrain limits the availability of land to support large-scale onshore solar and wind projects. This means that the offshore wind sector will provide most of the renewable energy. In addition, nuclear or fossil fuels are still viewed as being more cost-efficient then renewables in powering Korea's big industrial complexes.
Meanwhile, there appears to be growing resistance from conservative political groups to Moon's green energy plans and as well as a public backlash to renewable energy projects intruding on land use.
Korea under the administrations of Lee Myung-bak and Park Geun-hye had already identified green energy as a new economic driver. But their ambitious goals still fell short of expectations. Moon is making a similar argument that public investment in renewable energy will contribute to a post-COVID economic recovery.
Even before COVID, the Moon administration has been making some progress in encouraging the use of solar and wind power. It introduced incentives for the development of household and community solar projects and established tighter renewable energy standards for utilities. But this will not be enough to close the energy gap resulting from Moon's decision to phase out nuclear power plants.
As a result, Korea will need to increase its dependence on imported liquified natural gas, which now accounts for 27 per cent of electricity generation in Korea. But reliance on LNG brings its own unique set of problems since it exposes the country to global price fluctuations and energy security concerns.
This raises the question of whether Moon was too hasty in pushing for the closure of nuclear plants, prioritizing an election promise to do so in response to the 2011 Fukushima nuclear accident over economic realities. Phasing out nuclear plants, which are a carbon-free energy source, is likely to raise the cost of energy in Korea since nuclear now accounts for 23 percent of electrical power.
Moreover, the loss of nuclear power could impair Korea's ability to fight climate change. Korea's greenhouse emissions still remain high and its coal consumption actually increased in 2018, the only advanced OECD country to have done so. Coal accounted for 44 percent of electricity generation in Korea in 2018, compared to 28 percent in the U.S., another major coal consumer.
Korea continues to have a heavy economic stake in coal, the principal source of carbon emissions. Several Korean companies have won lucrative contracts to build coal-fired power plants in Southeast Asia, mainly Indonesia and Vietnam, and Korea is the second largest global investor in building coal power plants, with financing coming mainly from its state-owned banks.
Although the Moon administration had said it plans to close 30 coal-fired power plants, it should be focusing on eliminating the use of coal generation in the power sector. This can be done by increasing energy efficiency and relying on a mixture of renewables, nuclear power and LNG. The key to this strategy is to allow nuclear plants to continue operating at near full capacity and extend nuclear reactor lifetimes.
Germany presents a stark warning to Korea of what could happen if it phases out nuclear power and tries to replace it with renewable energy. The result has been a continued German dependence on coal and some of the highest electricity prices in Europe. In addition, the Moon administration should contribute to the international fight against climate change by restricting the use of state-run development banks to finance the building of coal power plants overseas.
John Burton (johnburtonft@yahoo.com), a former Korea correspondent for the Financial Times, is a Washington, D.C.-based journalist and consultant.
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In the launch of his Green New Deal this year. Moon repeated his promise first made in 2017 that non-hydro renewables would provide 60 gigawatts (GW) of energy, accounting for about a fifth of total energy production, by the end of the decade.
But there is increased skepticism around whether Korea's ability will reach that target. Renewables now account for only 4 percent of electricity generation in Korea compared to 10 percent in the U.S., according to the BP Statistical Review of World Energy 2019.
Fitch Solutions, a financial research group, estimates that renewables will only generate 31.9GW by 2029 because it will be more expensive than alternative energy sources, such as nuclear or fossil fuels, and thus will be economically unviable without sufficient subsidies despite the falling costs of solar and wind energy.
Pressure is growing on the government to deal with climate change. The National Assembly has passed a "climate emergency" resolution calling for a net zero emissions target by 2050. The government has responded by saying it will spend $64 billion over the next five years on the capacity of renewables and the development of "smart green cities."
But the government so far has failed to address some other issues. Korea's mountainous terrain limits the availability of land to support large-scale onshore solar and wind projects. This means that the offshore wind sector will provide most of the renewable energy. In addition, nuclear or fossil fuels are still viewed as being more cost-efficient then renewables in powering Korea's big industrial complexes.
Meanwhile, there appears to be growing resistance from conservative political groups to Moon's green energy plans and as well as a public backlash to renewable energy projects intruding on land use.
Korea under the administrations of Lee Myung-bak and Park Geun-hye had already identified green energy as a new economic driver. But their ambitious goals still fell short of expectations. Moon is making a similar argument that public investment in renewable energy will contribute to a post-COVID economic recovery.
Even before COVID, the Moon administration has been making some progress in encouraging the use of solar and wind power. It introduced incentives for the development of household and community solar projects and established tighter renewable energy standards for utilities. But this will not be enough to close the energy gap resulting from Moon's decision to phase out nuclear power plants.
As a result, Korea will need to increase its dependence on imported liquified natural gas, which now accounts for 27 per cent of electricity generation in Korea. But reliance on LNG brings its own unique set of problems since it exposes the country to global price fluctuations and energy security concerns.
This raises the question of whether Moon was too hasty in pushing for the closure of nuclear plants, prioritizing an election promise to do so in response to the 2011 Fukushima nuclear accident over economic realities. Phasing out nuclear plants, which are a carbon-free energy source, is likely to raise the cost of energy in Korea since nuclear now accounts for 23 percent of electrical power.
Moreover, the loss of nuclear power could impair Korea's ability to fight climate change. Korea's greenhouse emissions still remain high and its coal consumption actually increased in 2018, the only advanced OECD country to have done so. Coal accounted for 44 percent of electricity generation in Korea in 2018, compared to 28 percent in the U.S., another major coal consumer.
Korea continues to have a heavy economic stake in coal, the principal source of carbon emissions. Several Korean companies have won lucrative contracts to build coal-fired power plants in Southeast Asia, mainly Indonesia and Vietnam, and Korea is the second largest global investor in building coal power plants, with financing coming mainly from its state-owned banks.
Although the Moon administration had said it plans to close 30 coal-fired power plants, it should be focusing on eliminating the use of coal generation in the power sector. This can be done by increasing energy efficiency and relying on a mixture of renewables, nuclear power and LNG. The key to this strategy is to allow nuclear plants to continue operating at near full capacity and extend nuclear reactor lifetimes.
Germany presents a stark warning to Korea of what could happen if it phases out nuclear power and tries to replace it with renewable energy. The result has been a continued German dependence on coal and some of the highest electricity prices in Europe. In addition, the Moon administration should contribute to the international fight against climate change by restricting the use of state-run development banks to finance the building of coal power plants overseas.
John Burton (johnburtonft@yahoo.com), a former Korea correspondent for the Financial Times, is a Washington, D.C.-based journalist and consultant.
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