Power Sector Developments

The Republic of Korea has focused its energy sector on three main strategies – developing energy security, an energy efficient society and developing a sustainable energy, system particularly through new and renewable energy sources . (48)

Recognizing the utmost importance of energy security to the economy and to a sustainable future, the Energy Basic Law was drafted in December 2004. Under this law, the National Energy Committee will be created to set energy security as a national priority agenda.

According to the 3rd Electric Power Supply Basic Plan, the total annual power generation will be increased to 479GWh by 2020. This will require the construction of more than 20GW of capacity. The shares of nuclear, coal-fired, and new and renewable power generation capacity will be increased slightly. However, the share of oil-fired power generation capacity will be decreased (49).

 Restructuring the Electricity Industry

The power industry has been entirely dominated by the Korea Electric Power Corporation (KEPCO) that owned 94 per cent of generating capacity and 100 per cent of transmission and distribution. In 1999, the government adopted the Basic Plan for Restructuring the Electricity Supply Industry. KEPCO’s generation part was broken into one nuclear company and five companies using fossil-fuel or hydro power. KEPCO, 50 per cent of which is held by the government, still owns all of these companies along with the transmission and distribution grids. A state-owned power market was also established around the same time. Though there are plans to further privatize the thermal generation companies, there are no further plans to privatize KEPCO. A future planned phase of restructuring the electricity industry involves stimulating retail competition (50) .

 Renewable Energy

Aside from policies to conserve energy and enhance efficiency, the government is aiming to increase the share of new and renewable energy in total primary energy consumption to 5 per cent by 2011. The share stood at 2.1 per cent in 2005 which is low compared to other OECD countries. In addition, there has been insufficient investment in developing renewable energy technologies and a lack of support for disseminating such technologies.

Accordingly, the government has established the Basic Plan on Developing and Disseminating New and Renewable Energy Technologies in 2003. Under this plan, hydrogen fuel cell, photovoltaic and wind power technologies were identified for concentrated research and development support.

Various measures to promote renewable energy have been envisaged and implemented, including the provision of financial support and preferential tax treatments, and the mandatory use of renewable energy for newly constructed public buildings.

 Environmental Management

Environmental management activities include developing integrated environmental management systems at the corporate and utility level. KEPCO plans to become ISO14000 certified. Environmental impact assessments are also required for new facilities and are required to adhere to emission limits (51). Utilities are also working on installing equipment to reduce pollutant emissions and becoming more eco-efficient. A considerable amount of fly-ash is recycled and products of desulphurization are recycled as raw material for cement (52).

 Energy Efficiency

There is a strong push to transform the Republic of Korea to an energy-efficient society. Some activities being undertaken include encouraging industry to voluntarily conserve energy, subsidizing the installation of high-efficiency equipment and appliances along with raising the design criteria for energy saving in buildings. A three year plan is being formulated to reduce energy intensity. As an estimate, reducing the overall energy intensity (including all energy sectors) from 0.3 toe per US$1000 to 0.25 toe per US$1000 by 2011 will reduce consumption by almost 30 million toe and carbon dioxide emissions by 23.8 million tonnes (53).

 Affordability

As can be seen in Figure 31, though spending the least on electricity, the lowest income group spends a substantially larger portion of their monthly income on electricity – double the second lowest income group. However, electricity tariffs indicated by the KEPCO are much lower for the first 100 kWh (54) as can be seen in figure 32. In addition, KEPCO has a number of initiatives aimed at assisting disadvantaged or low income groups, such as assisting low income groups with their electricity bills and policies not to suspend an electricity service during extremely hot or cold seasons. The company also offers a discount for people with a serious disability (55).

 (56)

Stakeholders:

Korea Electric Power Corporation KEPCO
Ministry of Commerce, Industry and Energy
Korea electric power data network
Korea power engineering company
Electric Power Information Centre 
Korea South-East Power Co. Ltd (KOSEPCO)
Korea Midland Power Co. Ltd. (KOMIPO)
Korea Western Power Co. Ltd (KOWEPCO)Korea Southern Power Co. Ltd (KOSPO)
Korea East-West Power Co. Ltd (KEWESPO)
Korea Hydro & Nuclear Power (KHNP)
Korea Power Exchange (KPX)
Korea Electricity Commission
Ministry of Environment 

(48) Philippine Department of Energy, 2005 Energy Sector Accomplishment Report cited a survey submission from the Philippines Department of Energy to ESCAP
(49) Philippines Department of Energy website, http:www.doe.gov.ph, accessed in August 2007
(50) Power Development Plan 2005-2014 cited in a survey submission from the Philippines Department of Energy to ESCAP.
(51) Overview of the draft, 2006, PEP Update cited in a survey submission from the Philippines Department of Energy to ESCAP
(52) Department of Energy, http://www.doe.gov.ph/TE/Envi.htm, accessed in September 2007.
(53) Philippines Department of Energy website, http:www.doe.gov.ph, accessed in August 2007
(54) Power Development Plan 2005-2014 cited in a survey submission from the Philippines Department of Energy to ESCAP.
(55) Overview of the draft, 2006, PEP Update cited in a survey submission from the Philippines Department of Energy to ESCAP
(56) Department of Energy, http://www.doe.gov.ph/TE/Envi.htm, accessed in September 2007.