"Nuclear Power Is Not a Sustainable Alternative"…No Resumption of Construction for Shin Hanul Units 3 and 4 (Comprehensive)

Final Public Hearing on the 9th Basic Plan for Electricity Supply and Demand on the 24th
"From Next Year, Emission Trading Costs to Be Reflected in Power Generation Costs"
"4th Industrial Revolution Demand Forecast to Be Included in the 10th Basic Electricity Plan"

A panoramic view of the site for Shin Hanul Units 3 and 4 at the Hanul Nuclear Power Headquarters of Korea Hydro & Nuclear Power in Uljin-gun, Gyeongsangbuk-do. (Photo by Korea Hydro & Nuclear Power)

[Asia Economy Reporter Moon Chaeseok] "It is true that nuclear power plants are effective in reducing greenhouse gas emissions. However, considering the public demand for safe energy and the issue of spent nuclear fuel disposal comprehensively, I believe it is difficult for nuclear power to be a sustainable alternative."

On the 24th, at the 9th Basic Plan for Electricity Supply and Demand (Electricity Plan) online public hearing, the Ministry of Trade, Industry and Energy, the responsible department, responded to the question, "There is a concern whether the current nuclear power policy should be reconsidered to achieve carbon neutrality by 2050," with this statement.

This reaffirmed the existing position of gradually reducing the share of nuclear power plants in South Korea's mid- to long-term electricity supply and demand plan until 2034.

Government officials including Yoon Yohan, Director of the Electricity Industry Division at the Ministry of Trade, Industry and Energy, Lee Okheon, Director of the Electricity Market Division, and members of the advisory 'Working Group' for the 9th Electricity Plan participated in the online public hearing: Professor Yoo Seunghoon of Seoul National University of Science and Technology (Chair of the General Subcommittee), Professor Kim Changsik of Sungkyunkwan University (Electricity Demand Forecast Subcommittee), Dr. Lee Seongin of the Korea Energy Economics Institute (Demand Management Subcommittee), Professor Noh Jaehyung of Konkuk University (Reliability Subcommittee), Dr. Lim Jaegyu of the Korea Energy Economics Institute (Policy Subcommittee), Professor Park Hojeong of Korea University (Distributed, New and Renewable Energy Subcommittee), and Professor Lee Byungjun of Korea University (Power System Subcommittee).

The 9th Electricity Plan is scheduled to be announced at the end of this month after following the procedures stipulated in Article 25 of the Electricity Business Act: reporting to the National Assembly Standing Committee (Industry, Trade, Small and Medium Enterprises Committee), public hearing, review by the Electricity Policy Deliberation Committee, and final confirmation and announcement by the Minister of Trade, Industry and Energy.

"Shin Hanul Units 3 and 4 Excluded from Supply Volume"

Construction site of Shin Hanul Nuclear Power Plant. (Photo by Korea Hydro & Nuclear Power)

Officials from the Ministry of Trade, Industry and Energy and the Working Group who attended the public hearing firmly stated that new nuclear power plants such as the halted Shin Hanul Units 3 and 4 are not considered part of the national policy supply volume. While acknowledging their effectiveness in reducing greenhouse gases, they maintained the judgment that due to risks such as spent nuclear fuel disposal, it is difficult to use them as a major long-term national energy source.

Director Yoon said, "The basic principles of halting new nuclear power plant construction and prohibiting life extension of aging nuclear plants were reaffirmed in the 'Energy Transition Roadmap,' the '3rd Basic Energy Plan,' and the 8th and 9th Electricity Plans," adding, "According to these principles, nuclear power is planned to be gradually reduced over the next 60 years or more, so it is expected that nuclear power will maintain its role as a major power supply source in the process of achieving the 2050 carbon neutrality goal."

Dr. Lim, chair of the Policy Subcommittee of the Working Group, explained, "Power generation facilities with uncertainties in stable power supply had to be inevitably excluded from the supply volume," and added, "Considering issues such as spent nuclear fuel and domestic acceptance, nuclear power plants like Shin Hanul Units 3 and 4 were judged to be difficult to view as fundamental alternatives for carbon neutrality."

"Coal Power Plant Decommissioning Reflects Operators' Intentions"

[Image source=Yonhap News]

The seven coal-fired power plants currently under construction, including Gangneung Anin Thermal Units 1 and 2, Samcheok Thermal Units 1 and 2, Seocheon Shin Seocheon Thermal Unit 1, and Goseong High Thermal Units 1 and 2, will be completed as scheduled. However, regarding Yeongheung Units 1 and 2, which are planned to be converted to liquefied natural gas (LNG) power generation between 2031 and 2034, it was stated that this is a "measure reflecting the operator's intention."

Dr. Lim said, "The proposal to decommission Yeongheung Units 1 and 2 in 2034, reflected in the 9th Electricity Plan, is a matter to be carried out according to the operator's intention," and added, "Compensation will likely be reviewed through consultations with power generation operators after legislation currently under discussion in the National Assembly."

He further stated, "Despite restrictions on coal power plants to reduce fine dust and greenhouse gases, agreements have been concluded regarding the guarantee of minimum operating costs, and related regulatory revisions have been completed."

The Ministry of Trade, Industry and Energy and the Working Group judged that introducing a coal power generation total volume system together with a price bidding system would induce competition among coal power operators and help reduce greenhouse gases. Earlier, on October 7, Minister Sung Yunmo of the Ministry of Trade, Industry and Energy announced at the National Assembly Industry Committee's audit report that a 'coal total volume system' limiting the increase of coal power generation would be introduced and implemented in 2023.

Emission Trading Costs to Be Reflected in Power Generation Costs from Next Year

The Ministry of Trade, Industry and Energy also announced plans to implement environmental dispatch reflecting emission trading costs in power generation costs starting next year.

Director Lee explained, "One of the biggest core tasks of the 9th Electricity Plan is greenhouse gas reduction, and as a reduction measure, environmental dispatch in the electricity market and the coal power total volume system will be promoted simultaneously," adding, "Environmental dispatch will be structured to reflect the average emission trading cost over one year from next year into the cost."

Until now, Korea Electric Power Corporation (KEPCO) has borne three environmental costs: the Renewable Portfolio Standard (RPS) for new and renewable energy supply obligations, greenhouse gas emission trading costs (ETS), and coal reduction costs under the fine dust seasonal management system. However, starting next year, these will be separately billed on consumer electricity bills following the electricity rate reform plan announced on the 17th.

The government views it as difficult to predict whether environmental dispatch will cause electricity rate increases. Director Lee said, "The cost volatility will increase depending on how the integrated coal-LNG benchmark (BM) coefficient is set, and if Korea Gas Corporation's individual tariff system is applied, LNG prices may fall. There are many variables, so it is realistically very difficult to estimate the extent of electricity rate increases due to environmental dispatch."

"4th Industrial Revolution Electricity Demand Forecast to Be Included in 10th Electricity Plan"

The Ministry of Trade, Industry and Energy and the Working Group decided to increase new and renewable energy facility capacity to 77.8 GW by 2034 in the 9th Electricity Plan. The goal is to achieve a facility reserve margin of about 22% after 2029. Regarding this demand forecast, opinions were raised both that it was set excessively high and that it was set too low due to overly optimistic assumptions.

Regarding the opinion that the forecast was set too high, Professor Kim, chair of the Electricity Demand Forecast Subcommittee, explained, "We updated the Ministry of Strategy and Finance's forecast from last September and assumed an expected economic growth rate of 2.06% from this year to 2034 for demand forecasting," adding, "There are precedents where power demand increased as the economy rebounded after the 2000 Asian financial crisis and the 2010 global financial crisis, so it is difficult to expect a sharp decline in power demand after the COVID-19 pandemic."

In response to the criticism that the forecast was too low, he said, "We considered many forecasts related to the 4th Industrial Revolution, but due to many variables such as smart factories, smart cities, and smart homes, it was very difficult to accurately determine the increase or decrease in consumption," and added, "The increase or decrease in power demand and peak power demand forecasts due to the 4th Industrial Revolution were not explicitly reflected in this 9th Electricity Plan but will be included in the next supply and demand plan."

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