Republic of Korea

Targets and goals

The Republic of Korea uses a combination of energy sources to meet their electric power needs. These include thermal (oil, gas and coal), nuclear and hydropower. Estimates of electricity demand growth are around 4 per cent per year through 2015.

Imported petroleum is the most significant energy source, though the use of natural gas and nuclear power has increased in recent years. Renewable energy, mainly in the form of hydropower, is slowly increasing in capacity.

Owing to increasing energy demand and environmental concerns, policymakers in the Republic of Korea are now considering sustainable development, which encompasses economic growth and environmental protection.

The Government is planning to privatize the power generation assets of the State electricity utility, Korean Electric Power Corporation (KEPCO). The privatization will involve splitting KEPCO into separate generation, transmission and distribution units. In 2001, KEPCO was split into six separate subsidiaries to facilitate the move towards a market environment.

Electricity systems will be unbundled in phases to create a competitive market. The transmission system will still be exclusively owned by KEPCO to ensure fair competition and a stable supply of electricity, and an independent regulatory agency, the Korea Electricity Commission, was established in 2001 to monitor the market, protect consumers and manage the privatization process. From 2003 to 2008, wholesale competition will be progressively introduced, and eventually consumer choice will be introduced for large consumers. From 2009 onwards it is expected that all consumers will have the opportunity to choose their supplier.

The Government is also considering plans to restructure the energy pricing system to incorporate social costs, including environmental costs, into the cost of energy production. Other strategies include encouraging energy conservation, creating markets for renewable energy sources, research and development into mid- to long-term energy technology and planning strategic regulations for fair market competition.

Renewable Energy

Other than hydroelectric resources, the majority of renewable energy supply comes from capturing waste heat. Other renewable energy sources have not been greatly utilized. However, under the National Vision for Environmental Policies in the 21st Century, there is an increased focus on renewable energy sources, such as photovoltaic power and fuel cells.

Since the establishment of the New and Renewable Energy Development and Promotion Act in 1987, the Government has invested 174 billion Won (US$ 140 million) to research and develop renewable energy technologies, including photovoltaic power, fuel cells, bioenergy and waste energy.

In addition, some policy measures being considered to promote renewable energy include lowering installation costs, requiring utilities to purchase electricity from renewable sources, and developing pilot projects.

Efficiency measures

Owing to its scarce fossil fuel resources, the Republic of Korea has accorded high priority to energy conservation. As part of its energy vision, the Government will be focusing more on electricity demand management. Strategies being considered include encouraging energy efficiency in energy-intensive industries and encouraging industries with lower energy intensities such as communication, biotechnology and information. The Government began implementing energy conservation programmes back in 1979. Based on the Rational Energy Utilization Act, attempts were made to build a low energy consumption industry, with various energy conservation and efficiency improvement policies aimed at industry, transport and residential consumption.

Environmental impact

The Republic of Korea has ratified the Kyoto Protocol and plans to emphasize the development of nuclear power in an effort to reduce growth in carbon emissions. However, its status as a non- Annex I State means that the Republic of Korea is not obliged to meet specific targets.

The Republic of Korea has experienced rapid economic growth in recent years, though this slowed during the Asian financial crisis. The country’s energy consumption and energy intensity have increased alongside this growth, though its carbon intensity has actually remained relatively stable. The use of less carbon-intensive fuel sources is partially responsible for this.

The country’s energy consumption and carbon emissions are projected to increase by approximately 3 per cent per year through 2020, and its electricity consumption is projected to double within this period.

In order to reduce carbon emissions, one mechanism the Government plans to encourage is a more environmentally friendly lifestyle. This includes recycling energy-intensive resources and encouraging the further use of public transport. Examples of other strategies include introducing green pricing for new and renewable energy and encouraging the construction and renovation of housing to be more energy-efficient.

Stakeholders

• Korean Electric Power Corporation (KEPCO)
http://www.kepco.co.kr/

• Ministry of Commerce, Industry and Energy
http://www.mocie.go.kr/default.asp