Sky-High Gas Prices Prompt South Korea To Burn More Coal
South Korean utilities straining under the pressure of pricey gas are turning to cheaper coal to meet surging electricity demand during a power crunch.
Companies haven’t been curbing coal power generation since July, ignoring voluntary limits put in place by the government last year, according to people familiar with the matter, who asked not to be identified because the information isn’t public.
Coal power is seeing a global resurgence because of the energy crisis in the wake of Russia’s invasion of Ukraine.
As prices for liquefied natural gas soar and competition heats up for supplies of the chilled fuel, coal is looking more attractive to nations like South Korea, the third-largest importer of LNG.
The country is also pushing a shift toward nuclear energy.
“Ramping up coal and nuclear power is an obvious option for the government,” said Kim Namyll, a senior researcher at the Korea Energy Economics Institute.
“Looking for alternative energy sources that are cheaper than gas should be considered by the government given the massive cost pressure” on utilities.
South Korea has been trying to reduce its coal consumption as part of its decarbonization plan, which led former President Moon Jae-in to permanently shut at least 10 plants in 2017.
Under a program that began in 2019, state-run power generators must curb coal use in the winter months from December to March. Voluntary reduction during the remaining months began last year.
Korea Electric Power Corp., which is grappling with record losses on the back of surging energy costs, has requested that the voluntary cap be eased.
The request was one of the proposals to improve Kepco’s finances in a plan submitted to the government, according to an internal document seen by Bloomberg.
While the limit is voluntary, companies are still expected to curb their use of coal.
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Header image: NK News
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