[The Editors' Verdict]No One Takes Responsibility for the Nuclear Phase-Out Policy Failure

Electricity Rate Hike Due to KEPCO's Deficit
Energy Policy Directly Tied to National Security
No More Ideological or Political Interference

Kang Hee-jong Content Manager

What is suppressed will eventually explode. Policies that deviate from science and common sense reveal side effects. The Moon Jae-in administration's nuclear phase-out policy ultimately led to problems. The flawed blueprint of the national energy policy that started with the nuclear phase-out has become a threat ranging from Korea Electric Power Corporation (KEPCO) to the national economic system. Yet, no one has stepped forward to take responsibility.

KEPCO recorded a cumulative deficit approaching 22 trillion won by the third quarter of this year, with losses expected to reach 30 trillion won for the year. To resolve this astronomical deficit, a significant increase in electricity rates next year is inevitable.

The primary cause of KEPCO's insolvency was the sharp rise in fuel prices such as liquefied natural gas (LNG). KEPCO operates a business model where it purchases electricity from power generation subsidiaries or private companies and sells it to consumers. Although fuel costs surged due to the Russia-Ukraine war this year, the pace of electricity rate hikes lagged behind, resulting in accumulated deficits.

However, energy experts view the fundamental cause of KEPCO's deficit as the flawed energy policies of recent years. The Moon Jae-in government, inaugurated in 2017, halted new nuclear power plant construction to reduce dependence on nuclear power and instead expanded costly LNG power generation. This increased power purchase costs, but the government repeatedly claimed that "there will be no electricity rate hikes due to the nuclear phase-out" and suppressed electricity rate increases. Ultimately, with LNG prices soaring due to the Ukraine war this year, KEPCO's deficit ballooned to an unmanageable level.

KEPCO's problems did not end with KEPCO alone. To raise insufficient operating funds, KEPCO issued several trillion-won corporate bonds at high interest rates. This caused market funds to flow into KEPCO bonds, significantly shaking the financial market. The government is expected to raise electricity rates again next year to resolve KEPCO's cumulative deficit. This will act as a factor in consumer price inflation. Pressure to raise the Bank of Korea's base interest rate will inevitably increase. This is unwelcome news for companies and households already struggling with high interest rates.

Then, was the nuclear phase-out policy, which the previous government insisted on so strongly, rational and justifiable? Recent research results show that it was not at all. According to Our World in Data's tally of death rates by energy source, nuclear power had 0.03 deaths per 1 TWh (terawatt-hour), which was not much different from solar power (0.02) and was lower than wind power (0.04) and hydropower (1.3).

As of 2017, nuclear power's greenhouse gas emissions per GWh (gigawatt-hour) were 3 tons, lower than wind power (4 tons) and solar power (5 tons). Contrary to some concerns, nuclear power was a "clean and safe" energy source. Many scientists have argued this over the years, but the government stubbornly refused to accept it.

As the importance of energy security has increased after the Ukraine war, European countries such as Germany and the United Kingdom, which had led the nuclear phase-out, are returning to nuclear power. Even Japan, which experienced the Fukushima nuclear accident, has reversed its policy to extend the lifespan of existing nuclear plants or build new ones. It seems that our nuclear policy is finally settling into place. Ideology or politics must no longer interfere in energy policies that are directly linked to national security.

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