Current Energy Status in Korea

Size: px

Start display at page:

Download "Current Energy Status in Korea"

Erin Blankenship
5 years ago
Views:

2 Ⅰ Ⅱ Ⅲ Ⅳ Korea s Economic Development & Energy Current Energy Status in Korea Energy Policies: Governance & Major Policies A New Paradigm for Future: Sustainability 2

3 Korea s Economic Development &Energy 3

4 7 consecutive 5-year economic development plans 1 Manufacturing and export-oriented economic growth 2 Efficient mass production on the strength of skilled workers. Stable energy supply greatly supported the Korean economy development in the absence of endowed resources GDP per capita (USD) $22,451 $22,708 $20,000 $15,000 Global financial crisis $12,7 $21,632 $20,562 $,161 $17,041 $, $10,000 5-year economic development plans $7,355 $5,000 $67 $79 $100 (63) $1,000 (77) Asian financial crisis

Shipbuilding, ildi Steel, Petrochemical -

industries Energy consumption grew during

5 GDP grew by 1084 times between 62 and s : Textile - 70 s : Shipbuilding, ildi Steel, Petrochemical - 80 s : Automobile - 90 s ~ now : IT industries Energy consumption grew during the same period by 26.8 times, and per capita energy consumption by 14.4 times Shifts from coal to oil, from oil to nuclear and natural gas 5 2

6 GDP ( 12) 26.8 TPES Per Capita Consumption Energy/GDP ( 62) p 6 3

Unit: Million toe 300 250 11 4% 11 4% 2.6% 2.

977 978 979 980 981 982 983 984 985 986 987 988 989 990 991 992 993

7 Unit: Million toe % 11 4% 2.6% 2.6% NRE Nuclear Hydro LNG Oil Coal 0.5% 0.5% 18.1% 18.1% % 11.4% 38.1% 38.1% % 29.1% p

8 Unit p GDP growth rate % Primary Energy Consumption million toe Energy Intensity toe/million won Oil Dependency 1) % Total Energy Import billion US$ Share of Energy in total import expendi ture Overseas energy dependency rate % % Self-sufficiency Energy/Resource % Development Rate 1) Naphta as industry feedstock is included 8 5

9 Current Energy Status in Korea 9

10 By source(2012 p ) By Sector(2012 p ) Mtoe 3% 1% 11% 29% 18% 38% 18.4% 17.9% 2.3% 61.4% Coal LNG Petroleum Hydro Industry Rescom Transport Public Nuclear NRE 10 6

70 s oil-fired power 25% 3% 8% Hydro Coal 30% Oil L N G 80 s nuclear

11 Power Generation Power Generation Capacity Mix (2012 p ) 370MW in 62 grew to 79,972MW in 2012 p 60 s Anthracite and hydro power generation 70 s oil-fired power 25% 3% 8% Hydro Coal 30% Oil L N G 80 s nuclear and bituminous coal power 25% 9% Nuclear Others 90 s LNG-fired power 11 7

Total Expenditure for Import as of 2012 p 3.0% 20.8% 6.

3 billion US$ Oil products 64.4% Natural gas 0.

9 Million BBL & Naphtha 204.4 Million BBL) - 31.

4 billion US$ Coal Coal Crude oil Oil product LNG

12 Total Expenditure for Import as of 2012 p 3.0% 20.8% 6.4% 53% 5.3% Crude oil - Volume: Million BBL billion US$ Oil products 64.4% Natural gas 0.1% - Volume: Million BBL (including LPG 69.9 Million BBL & Naphtha Million BBL) billion US$ - Volume: 36.2 Million ton billion US$ Coal Coal Crude oil Oil product LNG Uranium Non-energy import Uranium - Volume: Million ton billion US$ billion US$ 12 8

Crude oil import as of LNG import as of 2012 p 2012 p 947.

13 Crude oil import as of LNG import as of 2012 p 2012 p million bbl 36.2 million ton 27.5% 32.0% 22.4% 28.3% 11.0% 6.0% 20.6% 5.9% 9.1% 11.4% 14.5% 11.3% Saudi Arabia Kuwait Qatar UAE Iran Rest Qatar Malaysia Russia Indonesia Oman Rest 13 9

14 Anthracite Coal Bituminous Coal 8.1 million ton 115 million ton 16.4% 14.8% 0.3% 3.2% 58% 5.8% 5.7% 9.7% 29.1% 10.2% 36.2% 32.0% 36.6% China Australia Australia Indonesia Viet Nam Russia Canada Russia USA Rest USA Rest 14 10

15 Overcapacity of refinery facilities due to large scale investments in 90s Total refinery capacity(2012) : 3.04 million b/d Petroleum export recorded at $54 billion(441 million BBL) in 2012 p (2 nd export commodity in Korea) Demand vs. Capacity Petroleum Product Exports 1,000 b/d 3,000 2,500 Demand Capacity Gasoline Kero/Jet Gas oil B-C Naphtha Other Export Amount Over Capacity Million bbl Million USD 55,000 2,000 1,500 1, ,000 20,000 10,000 5,

3Mkl / Pipeline : 3,022 km Incheon Terminal Bird s-eye view of Incheon LNG terminal (As 2012) Pyeongtaek Terminal Start

16 There are three LNG terminals and nationwide pipeline networks for transport of natural gas. National Pipeline Network Storage : 8.3Mkl / Pipeline : 3,022 km Incheon Terminal Bird s-eye view of Incheon LNG terminal (As 2012) Pyeongtaek Terminal Start Storage Capacity (1,000 kl, #) Re-gas Capacity (Ton/h) Tongyeong Terminal Natural Gas Terminal and Regional Pipeline Incheon Oct. 96 2,880(20) 4,350 Pyeongtaek Nov. 86 2,960(21) 4,036 Tongyeong Sep ,480(16) 1,890 total 8,320(57) 10,

Nuclear power plants In Operation Under Construction Yonggwang #1,2,3,4,5,6 Seoul Ulchin #1,2,3,4,5,6 Shin Ulchin #1,2 Wolsong

Total Kori 6 (5,137) 2 (2,800) 8 (7,937) Wolsong 5 (3,779) 1 (1,000) 6 (4,779) Yonggwang 6 (5,900) - 6 (5,900) Ulchin 6 (5,900) 2

35 20 10 11.84 18.17 6.69 5.62 476 4.76 399 3.99 4.93 2.77 2.38 1.79 2.

17 Nuclear power plants In Operation Under Construction Yonggwang #1,2,3,4,5,6 Seoul Ulchin #1,2,3,4,5,6 Shin Ulchin #1,2 Wolsong #1,2,3,4 Shin Wolsong #1 Shin Wolsong #2 Kori #1,2,3,4 Shin Kori #1,2 Shin Kori #3,4 Site In Operation Under Const. Total Kori 6 (5,137) 2 (2,800) 8 (7,937) Wolsong 5 (3,779) 1 (1,000) 6 (4,779) Yonggwang 6 (5,900) - 6 (5,900) Ulchin 6 (5,900) 2 (2,800) 8 (8,700) (As of Dec, 2007, Units: MW) Total 23 (20,716) 5 (6,600) 28 (27,316) T&D Loss Reduction Trend Loss rate(%) T&D Distribution - Transmission Loss Rate : 1.53% - Distribution Loss Rate : 2.20% p 17 13

18 Energy Intensity(Mtoe/$1000, 11 IEA) Consuming 38.6% of TPES, 77.1% of total manufacturing consumption Japan UK Germany US Korea OECD OECD Korea Bil. US$ Energy import Trade balance p energy import : billion USD Semiconductor+Automobile+Ship export : bill USD 0 SERI( 07) 10% oil price increase GDP Growth rate 0.35%p CPI 0.23%p Rate of operating profit 0.2%p 1814

19 TPES (million TOE) GHG Emission Energy Industrial Process Agriculture and waste (Unit : Mt CO2) % 85.3% 6.8% 9.4% 11.2% 5.3% RESCOM Public 10.2% Transport 14.8% INDUSTRY 29.2% ETC. 1.3% POWER 44.5% 15

20 Energy Policies: Governance & Major Policies 20

21 Energy policies were designed to support industrialization and improvement of living standards - Highest priority on securing all types of energy supply where feasible. - Great importance placed on the energy security and economic feasibility rather than sustainability. Government e implemented e various energy e policies in cooperation with public utility companies - In the aftermath of the first oil shock, the Ministry of Energy and Resources was created in 77 and merged into MOTIE in A wide range of public utility companies were established to facilitate public projects and programs. * KEPCO(61.7.1), KORES(67.5), KNOC(79.3.3), KOGAS(83.8) 2116

22 Except oil and petroleum products, other energy types are subject to government regulation in terms of import and pricing - Oil and oil products are currently a liberalized market with 4 refiners as a result of 97 price liberalization. - Coal: GENCOs and POSCO can freely import coal, but the price of coal briquette is under government control. - LNG: KOGAS is the sole importer, supplying NG to 33 private city gas companies. However, since 2006 entities other than KOGAS have been allowed to import LNG directly for their own use as a power generation feedstock. - Nuclear: Korea Hydro and Nuclear Power Company is responsible for the entire fuel chain of nuclear power generation subject to the strict government guidelines and planning. - NRE: Fully liberalized market with government support programs including Feed-in-tariff, and Renewable Portfolio Standard

Government has secured two effective financing vehicles.

weak. - Focused mainly on refinery and city gas companies - Recently the increase of private sector involvement has resulted in the

Oil Products Natural Gas Electricity Means: levy on petroleum import & sale Rate: 0.014 $/l for petroleum import, 0.

23 Government has secured two effective financing vehicles. * Special Account for Energy and Resources & Electricity Industry Foundation Fund Investment in the private sector is relatively weak. - Focused mainly on refinery and city gas companies - Recently the increase of private sector involvement has resulted in the rise of independent power producers and imports of resources, mainly coal and minerals. Oil Products Natural Gas Electricity Means: levy on petroleum import & sale Rate: $/l for petroleum import, $/l for petroleum sale Yield(2013): 5 billion $ Special Account for Energy and Resources New and Renewable Energy Energy Efficiency Electricity Industry Foundation Fund Others Means: levy on electricity fee Rate: 3.7% of electricity fee Yield(2013): 2.3 billion $ 18 23

24 Government aims to achieve energy security and at the same time improvement of industrial efficiency in response to changing global environments - Power sector: deregulation program began in 2000 and the vertical integrated KEPCO was separated into one national grid operator(kepco), 6 GENCOs and the Korea Power Exchange. - LNG industry: there was a heated debate on privatizing KOGAS in 2001, but the decision has been deferred in consideration of the special nature of the network industry, its market power in global market, and a potential Russian natural gas pipeline project. - Coal mines: the dwindling productivity and the worsening economics of domestic coal mines has led to their near-complete shutdown initiated by legislation to streamline the coal industry. As a result, only 5 coal mines are in operation, producing mere 2 million tons of anthracite coal in

25 Until today - Low & Intermediate Level Radwaste Disposal Center(04) - Expansion of NRE distribution * Distribution master plan, Change FIT to RPS - Debate on privatization of KOGAS - Reorganization of electric power industry structure Liberalization of petroleum industry Introduction of natural gas Kori #1 started maiden operation First oil shock Construction of Kori #1 (the first nuclear reactor) began began 2520

70s 80s 90s 2000s Turnkey Phase Non-Turnkey Phase Technological Self-Reliance Phase

3 unit completed 5 units under construction 4 units export 70s - early 80s: US WH,

technology independence construction of Korean standard NPP (OPR1000) 92-02 :

technology Secure a site for radioactive waste disposal facility - Establishment of a

26 70s 80s 90s 2000s Turnkey Phase Non-Turnkey Phase Technological Self-Reliance Phase Technological Advancement Phase 3 units completed 6 units completed 11 units completed 3 unit completed 5 units under construction 4 units export 70s - early 80s: US WH, Canada AECL direct import of NPP : introduction of US CE technology, pursuit of technology independence construction of Korean standard NPP (OPR1000) : development of next generation reactor APR : currently developing APR+(1500MW) technology Secure a site for radioactive waste disposal facility - Establishment of a special law for supporting region to host a site, selection of a site by application and local referendum 21 26

27 In 2009, Korea won UAE nuclear plant bid (4 reactors) world s 6th NPP Exporter Construction going as planned More orders expected to be placed in Middle East, Asia, Eastern Europe Stronger advantage for export : technical development and experiences to meet importers needs in technology transfer, bigger pool of experts, improvement tin export tfinancing i structure of overseas nuclear project Overall Management KEPCO/KHNP A/E KOPEC NSSS Doosan T/G Doosan Fuel KNFC Const ruction Local Constructor Start-up KHNP 22 27

28 Safety First Nuclear Operation After the Fukushima accident, concerns over nuclear safety increased and public confidence decreased * Survey result on nuclear power plant ( ) : Necessity (90% 88%), Safety (58% 35%) Comprehensive safety check of aged plants, intensified management of nuclear facilities and quality Ensure transparency & disclose information about nuclear plants Public Debate on Nuclear Spent Fuel Need to establish policy to manage spent fuel stored in power plants (70% of temporary storage facilities are saturated now) Establish a committee consisting of a balanced group of experts including private sector experts, stakeholders, etc 23 28

29 Conditions & Status - NRE is a clean energy source and an important method for responding to climate change and reducing GHG. - Korea has a disadvantage compared to Europe and other countries in NRE development due to its small territory, 70% of which is covered with forestland. - However, its future for industrial development is bright when NRE is combined with Korea s advanced manufacturing technologies such as in semi-conductors, ship building, and machinery. - As of today, 1GW of photovoltaic power and 500MW of wind have been installed. Limitations - Wind: Offshore wind power is in the works due to the saturation of onshore wind power. - Photovoltaic: Complete supply chain has been secured, but there are many difficulties due to worldwide restructuring

30 Industrial Development Strategy R&D for 10 major 2 nd gen. tech. * 2 nd gen. solar cell, large scale offshore wind power, etc. Establishment of test-bed by source (4~5 places) 10 Green Projects * Concentrated installation in 10 fields, such as ports, loads, etc. Start offshore wind power in earnest * Establishment of 100MW test-bed Support for whole life cycle from certification to market entrance Strengthening partnership with foreign countries using ODA Expansion of Domestic Distribution - Finance Support program was installed in 96. * Loans for commercial facilities, subsidies for individual facilities - FIT in the 2000s - RPS in 2012 for mass distribution of NRE and alleviation of government s financial burden

31 Negotiated Agreement on Energy-intensive Industries - Unlike a voluntary agreement, a negotiated agreement sets a goal on GHG reduction and energy efficiency and pursues cooperation with the government on fulfilling obligations GHG Target Management System - Design measures to implement GHG reduction in industry and power generation (the first half of 2012) * 480 companies (2012; Industry, building, waste, agriculture, livestock sectors) Emission Trading Scheme (ETS) - ETS is scheduled to be in place in 2015 by law. - Design detailed instructions for ETS in consideration of international trend and industrial i competitiveness (from the latter half of 2013) 26 31

32 AN New Paradigm for Future : Sustainability 32

1 st National Basic Energy Policy Formulated in 2008, Long-term Strategy until 2030 Design an optimal energy policy for green growth Three Principles: Economic Feasibility, Environmental Impact,

33 1 st National Basic Energy Policy Formulated in 2008, Long-term Strategy until 2030 Design an optimal energy policy for green growth Three Principles: Economic Feasibility, Environmental Impact, Public Acceptability There has been a paradigm change in energy-resource policy, which served as the backbone of 1 st National Basic Energy Policy - Increase in volatility of international energy prices and supply conditions - Materialization of international response effort to climate change and intensification of global Green Race focused on advanced nations - Increase in competition and efficiency of energy policy and demand for transparency and public consensus in Korea. Energy security Main focus was on economic feasibility and availability Sustainability New focus is on environmental impact and public acceptability 27 33

34 Bituminous 유연탄 coal Nuclear 원자력 LNG Petroleum 석유 신재생 NRE 34 28

35 Million TOE(toe / Thou>$) (0.367) (0.335) % (0.297) 23.5% (0.256) (0.233) 27.8% (0.185) BAU Target 46% For the last 15 ( 90~ 05) years, highest improvement was made by Germany (1.8%/y) For the last 8 ( 98~ 06) years, Korea s efficiency has improved by 1.3% per annum 35 29

36 Share of TPES NRE 2.6% nuclear coal 11.4% 29.1% LNG 18.1% oil 38.1% NRE 11.5% nuclear 27.8% LNG 12% coal 15.7% oil 33% 12 p : Million TOE 30: Million TOE Fossil vs. non-fossil(%): ( 11) 85 : 15 ( 30) 61 : 39 Primary energy consumption: (nuclear) ( 12 p ) 11.4% ( 30) 27.8% (NRE) ( 12 p ) 2.6% ( 30) 11.5% 30 36

37 Nuclear Capacity(10,000kW) Nuclear share of capacity(%) Nuclear share of generation(%) (59.0) (48.9) (35.5) (34.2)

38 (unit: million ton) 900 GHG emission projection (BAU) % 27% 30% Compared to BAU

39 GHG emission(gt CO2/year) 62Gt Reference Scenario 28Gt 48Gt Technology Innovation Scenario 14Gt * source: IEA Renewables Clean fossil fuel Energy efficiency improvement photovoltaic, wind, hydrogen fuel cell, IGCC CTL, GTL, CCS LED, Power IT, Energy Storage, Combined Heat & Power 33 39

40 The new administration has initiated the design of a new energy policy (completed by 2013 and applicable to 2035) Global & Domestic Challenges Global oil prices remain around $100 After Fukushima : Renaissance of nuclear power Issue of nuclear safety Increasing production of non-conventional oil & gas (shale gas, oil sand), arctic exploration, deepwater oil field, restructuring of NRE sector, including trade tension among major global producers. Energy policy no longer focused on numerical targets * NRE distribution rate, self sufficiency ratio of overseas resources development Demand for expanded market function, e.g. energy price Expansion of conflicts between regions and social classes in energy system 34 40

41 - Sustainability will play a bigger role in the 2 nd basic plan than in the 1 st. - Change in sustainability paradigm: Economic Feasibility Environmental Impact Public Acceptability Issues 1. 1EnergyMix - First of all shares of nuclear & renewable energy in Korea s energy mix until 2035 will be decided. * Subordinate plans such as LNG supply and demand plan, power development plan and NRE basic plan will be consecutively confirmed. 2. Demand Mgmt Target - Sharper increase in actual demand than forecast by the 1 st Plan - Overestimation of demand: criticism over idle supply facility - Underestimation of demand: responsibility for supply shortage 41 35

42 3. Enhanced Transparency in Decision Making Process - Debate process needs to be more active & effective 4E 4. Expansion of fpi Private Sector Investment t - LNG import, private sector participation for IPP, etc 5. Expansion of Energy Market Function - Energy price system, cost linkage system - Optimal involvement of government in energy market - Introduction of competition, improvement of distribution structure 36 42

43 43

Korea s Perspective on Energy and Economic Cooperation in Northeast and Central Asia

Korea s Perspective on Energy and Economic Cooperation in Northeast and Central Asia KEEI-IBRE Joint International Symposium on Energy Resource Cooperation and Corporate Strategy in Northeast and Central