South Korea Seeks Broad Fuel Base for Energy Security, Yoon Says
Stock Chart for Korea Gas Corp (036460)
The government wants its long-term energy mix “not to be tilted too much toward a single fuel, in order to boost energy security,” Yoon Sang Jick said in an e-mailed response to questions from Bloomberg News at the World Energy Congress in Daegu, South Korea. The government will also seek a “policy balance” between supply and demand, he said.
Yoon’s remarks are the first by a top government official after the energy ministry’s proposal to almost halve the nation’s planned dependence on nuclear energy. The plan will force South Korea, which imports almost all of its energy and was this year threatened with power cuts, to increase use of other fuels, including gas, to cope with surging consumption.
“The government will switch the policy direction to reflect changing circumstances regarding nuclear plants and address other problems including power shortages,” Yoon said, without referring to the ministry proposal. “We will shift away from the policy concentrated on supply and economic feasibility, to focus on restoring credibility, improving citizens’ quality of life and long-term policy sustainability.”
Nuclear energy should account for between 22 percent and 29 percent of power generation capacity by 2035, compared with a 41 percent goal introduced in 2008, the energy ministry said Oct. 13, citing the findings of a working group of academics and state officials. The ratio was 26.4 percent last year.
The group also proposes taxing soft coal, while reducing duties on natural gas and heating oil. The plan will be finalized this year after public feedback and cabinet approval.
South Korea will try to curb power demand through energy pricing policy and by improving efficiency in the long term, Yoon said, without elaborating.
Growing public concern over atomic safety following the 2011 Fukushima disaster in neighboring Japan and a fake report scandal at home has deepened the dilemma facing President Park Geun Hye’s government, with power demand expected to surge almost 60 percent by 2027. In July, Park called for tighter government regulation and monitoring of the nuclear industry.
The government in May closed two reactors found to be using substandard parts, and ordered the replacement of cables at two others, one off-line and the other under review before commercial operations. The shutdown led the energy ministry to warn of “unprecedented” power shortages during the summer. Power cuts were averted in part due to energy-saving measures.
With reactors remaining offline and South Korea heading toward the northern hemisphere winter, the energy ministry will next month announce its outlook for projected energy demand and countermeasures to prevent shortages, Yoon said.
“The situation will be better than in the summer if the three reactors shut down in May restart before the end of the year,” Yoon said. “We’re working to come up with measures to maximize supply, minimize public inconvenience and cut demand.”
President Park said today in Daegu her government will introduce measures to cut long-term power demand and create a 3.5 trillion-won market in electricity storage by 2017, creating 15,000 jobs.
South Korea’s retreat from nuclear energy, a mainstay of the country’s energy policy since its first reactor was built in 1978, will encourage the nation to sign new liquefied natural gas supply deals, Peter Coleman, the chief executive officer of Woodside Petroleum Ltd. (WPL), Australia’s second-largest oil and gas producer, said in an interview. South Korea is the world’s second-largest buyer of LNG, after Japan.
Korea Gas Corp. (036460), the nation’s monopoly wholesale distributor, will prepare for an increase in gas demand in line with the new energy plan, Chief Executive Officer Jang Seok Hyo said yesterday in Daegu.
South Korea and Japan must cooperate in the “supplier-dominated” LNG market, Yoon said. He also expects the two nations to closely work together to develop overseas LNG projects.
To contact the reporter on this story: Sungwoo Park in Seoul at email@example.com
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