Generic Hero BannerGeneric Hero Banner
Latest market news

Seoul may scale down nuclear expansion plans

  • : Electricity, Natural gas
  • 25/01/15

The delay to finalising the country's nuclear goals may make it unfeasible to build sufficient capacity before current assets expire, writes Evelyn Lee

South Korea's energy industry has faced a whirlwind of challenges since the impeachment of now-suspended president Yoon Suk-Yeol, with the political turmoil stalling a crucial review of its energy strategy in the national assembly. The government is now seeking to scale down its nuclear expansion ambitions in order to hasten the plan's review.

Yoon's surprise declaration of martial law last month was reversed within six hours owing to bipartisan political pressure and widespread protests, which resulted in a national assembly vote in favour of the president's impeachment and his subsequent arrest on 15 January. Yoon is suspended from office pending a ruling by the country's constitutional court — due within six months of the impeachment vote on 14 December. If six out of nine justices vote to uphold the impeachment, Yoon will be removed from office and presidential elections will be held within 60 days.

South Korea acted quickly following the martial law declaration, but government action has overall been slowed down by the political turmoil — including on energy policy. The latest draft of its long-overdue electricity plan was completed in June and scheduled to be submitted to the Trade, Industry, Energy, Small and Medium-sized Enterprises and Start-ups Committee of the national assembly by the end of last year. But the committee has suspended general meetings since 19 December, according to schedules released on its website.

The long-term electricity plan is renewed every two years and serves as a basis for business planning, especially for state-controlled companies. Gas incumbent Kogas' procurement strategy has historically reflected the electricity plan. The latest draft lays out Seoul's intention to build three more nuclear reactors by 2038. But planning and construction would take nearly 14 years, according to the government, so the delay in finalising the plan could result in a power supply shortfall by 2038 — when 9.15GW of existing nuclear capacity is set to expire.

Nuclear fallout

The government may opt to scale down its nuclear expansion ambitions in order to get the draft electricity plan seen by the committee — which must review the plan, although it is not required to approve it. And less nuclear capacity could increase the need for more gas-fired capacity.

The energy ministry pledged on 8 January to finalise the plan by June, after which it will pass related bills including the power grid act, but it did not say how it intends to progress the plan in the national assembly. The Korean Nuclear Society (KNS) responded on 9 January, accusing the government of allegedly planning to revise its nuclear objectives so it can speed up the plan's progress. The government's intent to revise its nuclear goals "without any scientific basis" shows that the electricity plan is just a "political bargaining tool that can vary depending on political interests", the KNS said. This threatens the stability of the South Korean electricity market, it added. The ministry did not respond to Argus' request for comment.

But the alleged revision may not have been solely driven by political motives. Seoul may have missed the window of opportunity for approving new nuclear capacity in the timescale required, judging by the 14-year timeline for planning and construction. It remains unclear how the government would offset any reduction in its nuclear ambitions, but South Korea's slow grid development may leave little alternative other than boosting gas-fired capacity. Under the current draft electricity plan, gas-fired output would account for a 25.1pc (160.8TWh) share of total generation in 2030 and 11.1pc (78.1TWh) in 2038, up from 22.9pc (142.4TWh) and 9.3pc (62.3TWh), respectively, in the previous plan.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/02/17

Philippines to review shutdown of 232MW coal plant

Philippines to review shutdown of 232MW coal plant

Manila, 17 February (Argus) — The Philippines will review plans to retire the 232MW Mindanao coal-fired power plant in Misamis Oriental province because the rehabilitation of a major regional power complex could cause an electricity supply shortage. The country could put on hold plans to accelerate the retirement of the Mindanao coal plant to 2026 from 2031, the Department of Energy (DoE) said. The plant, majority owned by private-sector Aboitiz Power, started operations in 2006 under a build-operate-transfer (BOT) agreement with the National Power and Power Sector Assets and Liabilities Management. The plant was originally scheduled to be retired in 2031 once the BOT agreement had run its course and plant ownership transferred to the national government, but authorities later decided to shut it down by 2026. The plant consumes over 1mn t/yr of coal. Authorities might review the retirement plans to offset the loss of power supply from the 1,000MW Agus-Pulangi hydropower complex, which will be rehabilitated next year. The complex comprises seven hydropower plants and serves as a key source of baseload power in the Mindanao grid. It is currently capable of producing only 600-700MW of power because of siltation and ageing infrastructure. Parts of the power complex are over 50 years old and its oldest dam, Agus 6, started commercial operations in April 1971. The rehabilitation involves repairing, replacing and upgrading the components of an existing hydroelectric power plant to restore its functionality, improve efficiency and extend its lifespan. The complex will run at a derated capacity during rehabilitation works, which could take several years. This comes as power demand in the Mindanao grid continued to increase last year. Demand averaged 2.248GW in 2024, a 10.2pc increase from 2.040GW a year earlier. The Mindanao plant could supply enough power to keep the grid stable at its full capacity, by covering for the loss in generating capacity and meeting the increase in power demand, DoE added. By Antonio Delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s economy grows in 2024


25/02/17
25/02/17

Japan’s economy grows in 2024

Osaka, 17 February (Argus) — Japan's economy expanded for a fourth consecutive year in 2024 as corporate investment increased, even as oil product demand fell. Gross domestic product (GDP) rose at an annualised rate of 2.8pc in October-December, according to preliminary government data released on 17 February, following growth of 1.7pc in July-September and 3pc in April-June. This sent Japan's full-year 2024 GDP up by 0.1pc from a year earlier, its fourth straight year of growth after a Covid-19 induced slump in 2020. Nominal GDP amount totalled ¥609.3 trillion ($4 trillion) in 2024, exceeding ¥600 trillion for the first time. Investment by private-sector companies rose by 1.2pc from a year earlier in 2024, recording annualised growth of 1.9pc in October-December. The rise partially reflected a government push for a green and digital transformation of the economy in line with its 2050 net-zero emission goal. Such spending is expected to continue to increase under Tokyo's economic stimulus package. Japanese business federation Keidanren has forecast that nominal capital investment could rise to ¥115 trillion in the April 2027 to March 2028 fiscal year, up by 7.5pc from an estimated ¥107 trillion in 2024-25. But private consumption, which accounts for more than 50pc of GDP, dropped by 0.1pc from a year earlier in 2024, as inflation capped spending by consumers. This also probably weighed on demand for oil products such as gasoline, despite government subsidies. Japan's domestic oil product sales averaged 2.4mn b/d in 2024, down by 5.2pc from a year earlier, according to data from the trade and industry ministry Meti. Gasoline sales, which accounted for 31pc of the total, dropped by 2.2pc to 752,700 b/d over the same period. But Japanese electricity demand edged up by 0.7pc year on year to an average of 98.8GW in 2024, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. Stronger power demand reflected colder than normal weather in March and unusually hot weather in October. Japan's real GDP is predicted to rise by 1.2pc during the 2025-26 fiscal year, following predicted 0.4pc growth in 2024-25 and a 0.7pc rise in 2023-24, the Cabinet Office said on 24 January. The figures are the Cabinet Office's official estimates and form the basis of its economic and fiscal management policies. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

China's CNOOC starts output at Brazil Buzios7 oil field


25/02/17
25/02/17

China's CNOOC starts output at Brazil Buzios7 oil field

San Francisco, 16 February (Argus) — China's state-controlled CNOOC has started output at the Buzios7 oil field offshore Brazil's Santos basin, the firm announced today. CNOOC has a 7.34pc interest in the project while Brazil's state-controlled Petrobras, which operates the field, holds 88.99pc, with the remaining 3.67pc owned by China's state-controlled CNPC Exploration and Development (CNODC). The Buzios oil field is expected to commission a total of 11 projects by 2027 with total output expected to reach 1.5mn b/d by then, although its production capacity totals up to 2mn b/d, CNOOC said earlier this year. The latest production at Buzios7 will bring the output of the Buzios oil field up to 1mn b/d in the second half of 2025, CNOOC said. Buzios7 is located at a water depth of 1,900-2,200m and is also the sixth project commissioned from the oil field. The Buzios7 project includes a floating, production, storage and offloading (FPSO) and subsea production system. The FPSO can produce up to 225,000 bl of crude, process 12mn m³/d of natural gas and store 1.4mn bl of crude. It is also equipped with closed flare to reduce greenhouse gas emissions, and heat recovery devices to reduce energy consumption, CNOOC said. CNOOC expects a slightly smaller share of output from overseas projects, or around 31-33pc from 2025-27, from previous expectations of 33-34pc, although it did not provide a breakdown on actual output forecasts. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU may trigger clause to boost defense spending


25/02/15
25/02/15

EU may trigger clause to boost defense spending

Munich, 15 February (Argus) — European Commission president Ursula von der Leyen wants to trigger an emergency clause that would allow member EU countries to significantly increase their spending on defense. She also warned that "unjust" tariffs on the EU will not go unanswered. Speaking at the Munich Security Conference on Friday, Von der Leyen said she "will propose to activate the escape clause for defense investments". Such a move would "allow member states to substantially increase their defense expenditure", she said. Von der Leyen's proposal would exempt defense from EU limits on government spending. Highly indebted EU members such as Italy and Greece have voiced support for the move, arguing that activating the escape clause would enable them to increase defense spending while avoiding other budget cuts. Fiscally conservative EU countries, including Germany, could push back against the idea. Von der Leyen's proposal comes at a sensitive time for the EU, with US president Donald Trump pressuring Europe to finance more of its own defense. Trump wants EU members of Nato to more than double military expenditure to protect themselves from potential aggression rather than leaning on Washington's support. Trump is also pushing to end the conflict between Russia and Ukraine. "Let there be no room for any doubt. I believe when it comes to European security, Europe has to do more. Europe must bring more to the table," Von der Leyen said, adding that the EU needs to increase its military spending from just below 2pc of GDP to above 3pc. The increase "will mean hundreds of billions of euros of more investment every year", she said. Tariffs will be answered Von der Leyen also reemphasized the EU's position on the recent US tariff decision, noting that tariffs act like a tax and drive inflation. "But as I've already made clear, unjustified tariffs on the European Union will not go unanswered," she said. "And let me speak plainly, we are one of the world's largest markets. We will use our tools to safeguard our economic security and interests, and we will protect our workers, our businesses and consumers at every turn," she added. Trump on 11 February imposed a 25pc tariff on all US imports of steel and aluminum effective on 12 March, although he said he would consider making an exemption for imports from Australia. US 25pc tariffs on steel and aluminum imports could result in a 3.7mn t/yr decrease in European steel exports, as the US is the second-largest export market for the bloc, European steel association Eurofer said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Lack of tariff details worry US energy markets


25/02/14
25/02/14

Lack of tariff details worry US energy markets

Washington, 14 February (Argus) — Uncertainty over potential tariffs on US imports from Canada and Mexico is already roiling North American energy trade, as trading desks struggle to understand how tariffs would be assessed and some buyers are unwilling to commit to taking March cargoes without more details. US president Donald Trump's planned 10pc tariff on energy commodity imports from Canada and a 25pc import tax on Mexican energy was originally set for 4 February but he postponed implementation until 4 March. The three governments are negotiating to avert a full-blown trade war, and many market participants are hoping that Trump would again delay their implementation after winning some concessions, as he did earlier this month. But even without tariffs in place, vast segments of the energy industry — oil and gas producers, refiners, pipeline operators, traders — are bracing for them. Energy trade across North America has been tariff-free for decades. Trump during his first term terminated the 1994 North America Free Trade Agreement, but replaced it with the US-Mexico-Canada trade agreement in 2020 that kept the energy trade terms unchanged. The sudden imposition of tariffs after decades of free trade could create legal uncertainty in contractual obligations related to the payment of tariffs and reporting requirements, law firm Vinson & Elkins partner Jason Fleischer told Argus . "It's been a long time since oil and gas pipelines have really had to deal with anything quite like this." At least one large Canadian refiner attempted to pass along the tariff to gasoline cargo buyers in the US ahead of the original 4 February start date, leading a few buyers to threaten to pull out of their contracts, market sources told Argus . Complicating the matter is the approach taken by the Trump administration to impose import taxes differs greatly from current trade terms. The regular US customs duties on crude, for example, are currently set in volumetric terms, at 5.25¢/bl and 10.5¢/bl depending on crude quality. In practice, nearly every source of US crude imports is exempt from tariffs at present. But the import tax set out in Trump's executive orders is to be imposed on the value of the commodity — without specifying how that will be calculated and at what specific point during the transportation process. Likewise, guidance on the new tariffs from the US Customs and Border Patrol (CBP), given just before the original 4 February deadline, did not address the specific issues relating to the energy commodities. CBP and the Treasury Department will have to issue regulations spelling out specific details on how tariffs are to be assessed and collected, Vinson & Elkins partner Jeff Jakubiak said. "The advice we're giving to companies is to collect information and get ready to provide it to the government at some point in the future," Jakubiak said. If tariffs go into effect, "there is likely to be a combination of reporting obligations by the transporter as well as the owner of the commodity. And in both cases, my advice is, figure out how you can accurately count and assign volumes that are moving across the border and figure out how you would price those." Market effects also uncertain The uncertainty over the timing and details of implementation of tariffs have left the affected market participants having to guess who will carry the burden of new taxes. The discount for Western Canadian Select (WCS) crude at Hardisty, Alberta, to the CMA Nymex WTI contract widened on the eve of the initial 4 February deadline of tariffs, suggesting that market participants expected Canadian producers to bear the brunt of tariffs. But over time, that burden likely will shift depending on individual market power of buyers and sellers. This could hit refiners in the US midcontinent that currently rely on WCS and have few alternatives to taking Canadian crude. They could, in turn, pass on the additional costs to consumers at the pump. US independent refiner PBF Energy said this week that tariffs would likely cut US midcon refinery runs , even if those refiners could find alternatives to Canadian crudes. Most Mexico-sourced crude markets are seaborne, giving producers in that country an alternative to US markets. "For this scenario, we anticipate [US Gulf coast] refiners will reduce consumption to the lower limit of their contractual obligations but will continue to purchase Mexican crude and pay the tariff via reduced refining margins," investment bank Macquarie said in a recent note to clients. Canadian producers also expressed concern about the uncertain impact of tariffs on crude volumes trans-shipped through the US, either for exports to third country destinations from Gulf coast ports or transported on US pipelines to destinations in eastern Canada. Without guidance from the US customs authorities, it is not clear if such flows would be subject to new US tariffs. Integrated oil sands producer Suncor's refineries on the Canadian east coast rely on crude flows from Enbridge's 540,000 b/d Line 5 or 500,000 b/d Line 78 that cross into the US in Michigan before crossing back into Canada. "I would say that I don't know that anyone on the planet knows exactly what's going to happen on tariffs," chief executive Rich Kruger said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more