'Electricity Rates, Intermittency, and ESS Stability' Missing Measures in the 'Power Supply and Demand' Plan

Draft Basic Plan for Power Supply and Demand until 2034
Generation Share Removed, Only Capacity Share Announced
Power Demand Decline Due to Slowing GDP Growth?
"Insufficient Reflection of 4th Industrial Revolution Demand Increase"
No Explanation of Renewable Energy Intermittency Alternatives
Only Mentioned "Quadrupling by 2034"
No Explanation of ESS Safety Alternatives... "To Be Reflected Later"

[Asia Economy Reporter Moon Chaeseok] "We have not conducted an analysis on the impact of electricity rates due to energy transition factors such as the increase in liquefied natural gas (LNG). Since matters related to electricity rates are not included in the scope of review specified in the Electricity Business Act, the General Subcommittee (the Committee) did not perform an analysis of electricity rates related to the energy transition."

Contents related to electricity rates were omitted from South Korea's basic power supply and demand strategy announcement. The Committee, an advisory body for establishing the 9th Basic Plan for Power Supply and Demand, announced the "Key Discussion Results of the Working Group on the 9th Plan Establishment" on the morning of the 8th at COEX in Seoul, without mentioning electricity rates. The Basic Plan for Power Supply and Demand is an administrative plan established by the government every two years under the Electricity Business Act, covering a 15-year period; the 9th plan includes supply and demand measures from this year through 2034.

The government has presented expanding the share of renewable energy, reducing greenhouse gases, and fine dust as criteria for energy planning through 2034. The 9th plan added a goal to reduce greenhouse gases to approximately 193 million tons by 2030. Accordingly, the Committee released a draft that reduces coal-fired power plants and replaces them with LNG. However, it is known that the Committee will not review electricity rate issues at a later stage.

The Ministry of Trade, Industry and Energy and Korea Electric Power Corporation (KEPCO) have also refrained from making clear statements regarding electricity rate increases. After the announcement of the key discussions of the 9th plan, KEPCO stated, "We plan to prepare a plan to reform the electricity rate system in the first half of this year and apply for government approval," as disclosed in July last year, but the specific reform plan and announcement schedule have not been finalized. KEPCO maintains the position that it is difficult to make autonomous remarks about electricity rates without discussions with the Ministry of Trade, Industry and Energy.

There are also concerns that confusion may increase because only the share of installed capacity by power generation source, not the share of power generation volume, was announced in the key discussions of the 9th plan. Although the Committee announced the draft on that day, before finalizing it, it must go through the Ministry of Environment's power environment impact assessment and public hearings. Chairman Yoo Seung-hoon said, "This Committee focused on discussions related to installed capacity," adding, "While the share of power generation volume by source is also necessary to accurately calculate greenhouse gas and fine dust emissions, procedures such as the power environment impact assessment remain."

Despite the high possibility of a surge in power demand due to the 4th Industrial Revolution, the Committee lowered the average annual growth rate of maximum power demand through 2034, which has become a point of controversy. The Committee reduced it by 0.3 percentage points from 1.3% in the 8th plan announced in December 2017 to 1%.

The Committee judged that power consumption would decrease considering changes in per capita gross domestic product (GDP) and mid- to long-term temperature changes. Given the precedent of a record-breaking cold wave in winter 2018 and a heatwave in summer immediately after the 8th plan announcement, which caused a surge in power demand and forced urgent demand reduction requests (dispatch instructions), accurate demand forecasting and clear explanations were required.

Chairman Yoo said, "Recent achievements in renewable energy demand management are also emerging," adding, "We reflected the electric vehicle supply targets considering charging patterns like 'after-work charging' from California, USA, rather than Jeju Island style, and the expansion of self-owned solar power management and supply in the demand forecast."

Measures to secure the intermittency of renewable energy (the phenomenon where power generation varies depending on weather and seasons), a core issue related to power supply and demand stability, were also not mentioned. Critics say this is a critical omission since supply and demand stability strategy is the most important element in the power supply and demand plan.

On that day, the Committee announced that the total installed capacity in 2034 is projected to be 122.4 GW. The reserve margin was set at 22%. To maintain the reserve margin, a target capacity of 127.1 GW is required, resulting in a shortfall of 4.7 GW, which they plan to fill with LNG and pumped-storage hydroelectric power.

Professor Jung Dong-wook of the Department of Energy Systems Engineering at Chung-Ang University pointed out, "An explanation regarding the feasibility of how much the ESS capacity should increase annually to ensure supply and demand stability is necessary," adding, "There is no presentation of site restriction conditions or alternatives for new pumped-storage hydroelectric power installations to cover the 4.7 GW shortfall."

There are already predictions that increasing renewable energy power generation from 19.3 GW this year to 78.1 GW by 2034, about four times, will not be easy. This is because it is necessary not only to increase capacity but also to solve intermittency issues and ESS fire safety problems. There is also the issue of having to fill the gap with expensive LNG power generation until renewable energy facilities are expanded.

Professor Lee Deok-hwan, Emeritus Professor of Chemistry and Science Communication at Sogang University, said, "Currently, to cover renewable energy power generation, facilities equivalent to 700 soccer fields are needed, and according to the Committee's explanation, this means removing about 2,000 soccer fields by 2034," adding, "If the plan is to increase renewable energy power generation about fourfold over 14 years, a concrete explanation is needed on how to address LNG supply variability, intermittency, and ESS safety measures until then."

Regarding this, Professor Kim Jin-ho of Gwangju Institute of Science and Technology, who leads the demand management working group in the Committee, said, "The General Subcommittee is reviewing specific target quantities and levels for demand management such as ESS," adding, "I believe these will be sufficiently reflected in the future."

This content was produced with the assistance of AI translation services.