1. NS4960 Spring Term 2018 Korea: Energy Policy
Oxford Analytica South Korea: EnergyPolicy Will Put Industry First, August 15, 2016

2. Overview Developments in South Korea's energy sector
South Korea has one of the highest energy import dependencies in the world
Despite policy statements and actions in support of the country's emission targets, South Korea's coal generating plants will see a major expansion
This will be supported by nuclear power plant construction.
Little room left for either renewables or natural gas in the electricity sector

3. Recent Developments I
Crude oil consumption has risen 8.6% over the period
During this period coal consumption has increased 54.2%
Natural gas demand has also risen strongly, but consumption declined in 2014 and 2015
Despite their clear potential to reduce energy import dependency, renewables barely register in South Korea's energy mix % of the total
Although country has invested in some innovative projects such as tidal power, it has been slow to embrace new energy generation technologies
Wind and solar exist, but at very low levels of generating capacity

4. Recent Developments II
Despite its large manufacturing and export sectors, South Korea has only one company among the top ten solar module manufacturers.
No South Korean companies feature among the major wind turbine manufacturers
South Korean industrial strategy remains centered on nuclear power and fossil fuels.
Coal is the cheapest and the least exposed to supply disruption
At the same time environmental organizations have judged South Korea's greenhouse gas emissions targets under the Paris Agreement inadequate for a country at its level of economic development

5. Recent Developments III
New Building Program
There are twelve new coal-fired power plants under construction
Will add just over 10 GW of new capacity and
A further eight coal plants planned which add 7.4 GW
If all built South Korea's coal fleet would grow from 35 GW in to 45 GW in 2011 and 49 GW by 2016
Country produces little coal itself, so estimates are for coal import demand to rise from 94 million tons in 2015 to 130 million tons by 2021

6. Recent Developments IV
Nuclear reliance
South Korea currently has 24 reactors
There are four reactors under construction
This new build program should add 1.4 GW new nuclear capacity each year for period
Two further 1.4 GW reactors have been approved and scheduled for completion in and 2022
An additional four 1.4GW reactors planned (but not yet approved for completion between 2022 and 2027.

7. Korea Nuclear Capacity

8. Korea: Industrial Strategy
Korea Hydro and Nuclear Power (KNHP) has two reactors currently under construction which will be the first to have 100% core components and equipment manufactured domestically
Underpins country's ability to export nuclear technology
Just sold and will staff four units to the UAE -- competition
Country also wants to export coal-fired power plants
Contracts in Vietnam and Indonesia
Country appears to have adopted an industrial strategy
Based on heavy industry rather than expanding its manufacturing know-how to new forms of energy generation.
Means prioritizing heavy industry both at home and export.

9. Assessment Likely developments
Thermal coal imports are set to increase by 40% by 2021
LNG imports likely to remain flat (and possibly contract) out to 2030
Emissions targets are unlikely to be met and local air pollution is likely to worsen
Korean government will come under pressure regarding its international climate change obligations and rising concern with air pollution
Economy's concentration on heavy industry opens its wider economic strategy to some risk
Country may be caught
With industries with limited growth prospects and
Without sufficient diversification into higher-growth energy technologies such as renewables