?Coal, 탈Nuclear, 탈Resource... Energy Plans Losing Momentum Amid Troublesome Policies

The Democratic Party Floods Energy Transition Bills in Competition... Pursuing Revocation of Nuclear and Coal Power Licenses and Exclusion of IGCC New Energy
Overseas Resource Development Policies Promoted by MB Government Also Nullified
A Stable Mid-to-Long-Term Energy Roadmap Must Be Established Despite Regime Changes

[Sejong=Asia Economy Reporter Kwon Haeyoung] Concerns are spreading that the century-long energy plan is being shaken due to the rapid energy transition push by the ruling party and government aiming for carbon neutrality by 2050. Although a blueprint for carbon neutrality has been presented, there are criticisms that rapidly reducing reliance on existing coal power plants and nuclear power, which are essential for energy supply, will only increase the burden on the power generation industry and raise environmental costs for the public. The resource development policies promoted during the Lee Myung-bak administration are also being completely scrapped, lending credibility to calls for establishing national energy policies from a mid- to long-term perspective.

According to related industries and the National Assembly on the 22nd, numerous related bills are being introduced as the ruling party and government push policies for coal phase-out and nuclear phase-out.

Last year, the “Act on Support for Energy Transition,” primarily proposed by Rep. Yang Yi-won of the Democratic Party of Korea, included provisions allowing the suspension of construction of nuclear and coal power plants already built or under construction without the consent of power producers. If unavoidable for energy transition and necessary for public interest, the Energy Transition Committee can review and decide to revoke the designation of the relevant power project. The bill also included a clause stating that compensation funds for project revocation would be sourced from money collected from nuclear and coal power plant operators. Although the ruling party and government agreed to delete such provisions due to opposition from the power industry and government concerns, the industry remains bewildered by legislative attempts to revoke licenses for nuclear and coal power plants, which are essential for stable power supply during the energy transition.

The proposed amendment to the Renewable Energy Act, which excludes Integrated Gasification Combined Cycle (IGCC) coal technology from new energy sources, also faces criticism for accelerating the energy transition too rapidly. Projects previously promoted as national initiatives under the guise of eco-friendly technology are now being excluded from new energy sources and suddenly targeted for discontinuation.

▲Coal Power Reduction, Three Times the 8th Plan Target= The government is also driving forward coal and nuclear phase-out policies. In the 9th Basic Plan for Electricity Supply and Demand, the government announced plans to reduce coal power plant capacity from 35.8 gigawatts (GW) in 2020 to 29 GW by 2034, and nuclear power capacity from 23.3 GW to 19.4 GW during the same period. To achieve this, the number of coal-fired power plants, currently 60 units, will be halved to 30 units by 2034?three times the reduction target of the 8th plan (which aimed to reduce by 10 units).

New nuclear plant construction and life extension of aging nuclear plants are also prohibited. Nuclear plants, which increased from 24 units in 2022 to 26 units in 2023, will be reduced to 17 units by 2034. In this process, construction of Shin Hanul Units 3 and 4 was completely canceled, and after controversy, the government extended the construction plan approval period until the end of 2023, deferring the decision on whether to resume construction to the next administration.

The nuclear phase-out policy contrasts with Japan’s move to reverse course by expanding nuclear operations for energy transition. After the Fukushima nuclear accident in 2011, Japan halted operations of 60 nuclear reactors. However, for carbon neutrality, nuclear power?which emits no greenhouse gases and is economically advantageous?is deemed indispensable, and Japan plans to increase its nuclear share from 3% in 2017 to 20-22% by 2030.

▲Overturned Overseas Resource Development Policy... Risk of Falling Behind in Global Resource Competition= Overseas resource development policies promoted by previous administrations are also being overturned rapidly. Korea Resources Corporation (KORES), which fell into capital erosion due to reckless resource development during the MB administration, is one example. The government persuaded the National Assembly to inject an additional 1 trillion won in capital and merged KORES with the Korea Mine Reclamation Corporation for restructuring, but following a 2018 task force recommendation, decided to sell all of KORES’s valuable overseas assets. Mines of thermal coal, nickel, cobalt, and copper in Australia, Africa, and Panama are being put up for sale, raising concerns that Korea may fall behind in the future global resource competition. These are resources essential for Korea’s manufacturing industries, including batteries and special steel.

Professor Kang Cheon-gu, invited professor at Inha University, said, “Energy policies, including resource policies, are treated as accumulated evils whenever the administration changes. Energy policy should guarantee sustainability and not be the exclusive property of any single administration. Therefore, it is necessary to establish an energy roadmap that can be continued regardless of changes in government.”

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