Decarbonization Pathway of Korea

Yongsung ChoKorea Energy Economics Institute

www.keei.re.kr

Status of Korea : ENERGY

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3

Energy Policy Challenges in Korea

Source: Ministry of Trade, Industry and Energy (MOTIE)

RE share of Power Generation in Major Countries

0.05 0.04 0.04 0.07

1.56 1.33

1.08 1.02 1.09 1.00 1.04 1.20

3.43 3.75

4.03

4.97

6.81

7.24

0

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Total power generation Share of renewable energy

Note: Renewable energy does not include new energy, fuel-cell and IGCC.Source: Calculation based on KESIS, www.kesis.net, KEEI

TWh

%

FiT

RPS

Power Price of Residential(unit: US$/MWh)

5Source: Bloomberg NEF

Industrial Power Price(unit: US$/MWh)

6Source: Bloomberg NEF

Energy Transition Policy of Korea

Reducing reliance on coal and putting stricter regulation on emission

Expansion of Renewable Energy

Nuclear Power phase out

• To stop the building of new 6 reactors (8.6GW)

• Not to permit the operation extension : In 2030, expected to phase out 11 reactors (9.3GW)

• Temporary shut down coal-fired power plants

• Reforming fuel tax system to reflect environmental cost

• To Switch planned coal power plants to LNG

• Shut down 10 old coal-fired power plants (3.3GW)

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30000

35000

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45000

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

유연탄발전설비용량변화추이

호기 유연탄설비용량

(unit : MW) (unit : #)

10

0

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20000

30000

40000

50000

60000

70000

80000

17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81

유연탄설비용량

원자력설비용량

(unit : MW)

11

Paradigm shift of Energy Policy in Korea

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Progress of Energy Transition in Korea

3rd Energy Master Plan (expected Mar. 2019)

Consistency

8th Basic Plan for Long-term Electricity Supply and Demand (Dec. 2017)

Renewable Energy 3020 (Dec. 2017)

Revised 2030 GHG Reduction Roadmap (Jul. 2018)

9th Basic Plan for Long-term Electricity Supply and Demand (2019)

Decarbonization Target in Korea

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Revised 2030 GHG Reduction Roadmap

GHG Reduction Target(Million tons)

Domesticreduction(25.7%)

Overseasreduction(11.3%)

37%from BAU

(315)

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2

3

4

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Renewable Energy 3020

Current and New Targets for Renewable Energy (%)

Targets for Renewable Energy Mix by Source (cumulative, GW)

7.2%

11.7%

20.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2016 Current Target 3020 Target5.7

36.5

1.2

17.7

0

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20

30

40

50

60

70

2017 2030

PV Wind Bio-E Waste-E Etc.

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3rd Energy Master Plan

2017 2030 2040

Demand

Total Final Energy Consumption(mil. toe) 176.0 179.5 176.6

Energy Intensity(toe/mil. KRW) 0.113 0.084 0.072

Supply Share of Renewable Energy in elec. Generation (%)

7.6(est.) 20 25~40

Environment

GHG missions from fuel combustion(mil. ton)

601.0(’15) 536.5

PM emissions in power sector(thousand ton) 34 13

PM emission in transportation sector(thousand ton) 34 27 21

Participation Renewable energy power plants(ten thousand) 43 471 611~1,039

This is recommendation by Working Group.

The 3rd Energy Master Plan is under further consideration by the government.

Korea Initiative on Energy Efficiency (under consulatation)

3 Key direction to reform of energy consumption structure

5 Main Sectors & 12 Core Tasks

‘Efficiency First’ Policy direction

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Market Transformation ①Top runner initiative, ②smart mobility

Platform ③EMS, ④National Energy Information Integrated Platform, ⑤Energy Innovation Community, ⑥Community based Platform

Statistics ⑦Benchmark in industry sector, ⑧Benchmark in building sector

Cooling/Heating ⑨Diversifying cooling/heating resources ⑩Korea Heat Plan

Minimizing energy loss ⑪Enhance Network Efficiency ⑫Minimizing loss in each sector

Barriers

LCOE Range : PV Non-tracking (unit: $/MWh, nominal)

Source: 2H 2018 LCOE Update, BNEF 2018

LCOE Range : Wind Onshore(unit: $/MWh, nominal)

Source: 2H 2018 LCOE Update, BNEF 2018

Thank youyscho@keei.re.kr

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