Domestic pressure resulting from a fake safety certificate scandal has resulted in the reassessment of the future of nuclear-generated power in South Korea. The country’s recent announcement that it will be shifting away from its previous nuclear power-skewed generation goals will be largely positive for the liquefied natural gas (LNG) market in the short-term, but may also provide additional support for the continued development of its renewable energy sector.
While initially the government had plans to increase its dependence on nuclear power, the results of a study conducted by a government working group has recommended against pursuing this increase. Indications are that the government will likely follow through on these recommendations. Although the majority of this nuclear generation shortfall will in all likelihood be replaced with LNG-generated power, the resulting financial costs associated with this increased dependence on imports may provide an added incentive to the further development of renewable energy in the country.
As part of the National Basic Energy Plan and associated renewable portfolio standard, South Korea is already committed to growing its renewable energy sector to account for 11% of consumed energy. Another key goal of the National Basic Energy Plan is to increase the country’s self-sufficiency in energy generation, since an increase in LNG-generated power does not fit with this goal (South Korea is one of the world’s largest LNG importers), South Korea will have to supplement its energy needs through alternative mechanisms.
What are the options available to South Korea? It could simply adjust its electricity prices but given the recent increase in demand for LNG in Asia, this may only be an interim solution and will not be sustainable. Increasing coal-generated power is an alternative but does not address the fundamental desire to move away from energy imports. Based on its current installed generation capacity this leaves oil-generated power (same issue as LNG and coal), hydroelectric power and renewable energy-based generation such as solar PV, solar thermal, wind as well as biogas.
Historically, South Korea’s solar PV sector has grown at attractive rates and has fostered the development of a well-established domestic manufacturing base. In a recently published report on this country, ClearSky Advisors expects to see continued growth in the country’s solar PV sector with annual installations continuing at 2012 and 2013 levels out to 2015 followed by a slight slowdown. Driven primarily by the effectiveness of its renewable portfolio standard and Home Subsidy Programs, solar PV development is set to increase across project types and may in part fill the gap left by nuclear power.
As part of its ongoing research into emerging global solar PV markets, ClearSky Advisors has recently published an analysis of the policy and market fundamentals that form the basis of the South Korean renewable energy sector, focusing primarily on solar PV. If you are interested in more information about our Global Emerging Solar PV Market and Policy Intelligence service, please contact us at firstname.lastname@example.org or call +1-877-333-5821.
Photo Credit: Emmanuel Dyan