Seoul reaffirms its commitment to reduce coal reliance
Coal-fired power generation in South Korea is expected to decrease by 23pc by 2030 from 2019's level, under the government's ninth basic electricity plan. This would reduce annual power-sector coal consumption by around 18.6mn t/year of NAR 5,700 kcal/kg-equivalent material.
The ministry of energy and industry (Motie) last month finalised its plan to reduce the share of coal in South Korea's electricity mix to 29.9pc in 2030, compared with 40.29pc in 2019. The plan also confirms the government's intention of converting 24 of state-owned Kepco's coal units with around 12.7GW capacity to run on gas by 2034, although gas' share of the power mix will still decrease to 23.3pc in 2030, from 25.8pc in 2019.
The government also aims to have renewable sources account for around 121.7TWh or 20.8pc of power generation by 2030, which implies overall power generation will be around 585.1TWh in 2030, up by around 4pc from 2019.
On this basis, the targeted 29.9pc share for coal would be the equivalent of 174.9TWh in 2030, down by around 51.9TWh from 226.8TWh in 2019. This is the equivalent of 62.8mn t/year NAR 5,700 kcal/kg-equivalent coal burn in 40pc efficient plants, according to Argus' analysis, which would be 18.6mn t/year lower than in 2019.
Gas-fired power output would decrease by 8.8TWh to 136.3TWh in 2030 from 2019 under the plan, which is equivalent to 16.4mn t annual LNG consumption in 55pc efficient power plants and 1.06mn t/year less LNG than in 2019.
The ministry also plans to reduce the country's coal capacity to 32.6GW and increase gas capacity to 55.5GW in 2030. Based on these targets, South Korean coal capacity would be dispatched at a 61pc load in 2030 compared with a 70pc load in 2019. But gas' load factor will decrease by more than 32pc to 28pc in 2030, as fossil fuels are expected to play a bigger role in meeting peak power demand and a smaller role in the base load amid rising renewable generation.
The Moon Jae-In administration remains committed to its nuclear phase-out policy in the latest electricity plan and will gradually reduce nuclear capacity to 20.4GW in 2030 and then 19.4GW in 2034, from 23.25GW in 2019. But nuclear's share of total generation will remain flat at 25pc in 2030 compared with around 25.9pc in 2019, which means South Korea's annual nuclear output will edge higher to 146.3TWh in 2030, from 145.9TWh in 2019, according to Argus' analysis.
Solar capacity accounted for around 71pc of South Korea's total renewable capacity as of 2020, with 2020 solar output expected to reach 16.6TWh. Motie has forecast solar output to increase to 45.5TWh in 2030, accounting for around 37pc of all renewable generation.
The share of wind generation in the renewables mix will increase to 33pc in 2030 from 7.5pc in 2020, driving the overall growth in renewable output.
South Korea typically updates its 15-year energy plan every two years, although the ninth plan was set back by over a year.
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