South Korea's Energy Transition and Its Implications for Energy Security

The study was conducted by the South Korean Think Tank Climate Change Center (CCC) for KAS RECAP. It comes to the following conclusion:

Asian countries, particulary South Korea, have heavily relied on imported energy sources more than 90 percent (94% of its primary energy). As seen in the inter-chapter, fossil fuels including oil, coal, and gas account for about 85%.

In addition, to support rapid economic growth and manufacturing industry, Korean government and utility companies have provided relatively cheap electricity resources. Electricity comes from fossil fuels (coal 39%, LNG 19%, oil 6%) and nuclear energy (31%). This results in large amount of GHG emissions. The portion of renewable energy and hydro energy is relatively low (4% and 1% respectively).

Increased coal consumption due to nuclear power plants safety test after 2011 begot environmental side effects such as particle matter air pollution. Power sector accounts for 60 % of coal consumption for baseload power; and industry does 38%.

Nuclear energy accounts for 33% of total electricity power generation (528,091 GW in 2015). Current Korean government announced energy transition policy aiming to reduce reliance on nuclear energy and coal power plants.

Renewable energy in Korea ranked low (lowest as 34 OECD countries). Only 4.5% of final energy consumption comes from renewable energy, but mostly from waste incineration (64%). Currently Korean government announce new renewable 3020 implementation plan to achieve 20% renewable power in energy mix by 2030. For this, 53GW of new renewable energy facilities need to be constructed. As policies tools, the government implements renewable portfolio standard (RPS) for the raise of obligation rate by 28% in 2030.

In summary, energy supply and demand in Korea requires energy transition. First, Korea imports most of energy sources (more than 95%). Second, imported energy sources are mostly fossil fuels including coal, gas, and oil. Third, nuclear energy accounts for large portion of electricity generation. Fourth, Korea declared 37% of GHG reduction as NDC under the Paris Agreement. Considering these factors, the current government proposed energy transition as national energy agenda. Energy transition aims to build up renewable energy oriented, decentralized, and smart energy system.

Qualitative interview of this study identified barriers for energy transition plan and implementation. First, lack of public support and participation in renewable energy policy can impede the advancement and adoption of renewable energy. German energy transition history began 1970s that resulted in the creation of political party such as Green Party. According to a public poll, 92% of Germans support the energy transition to phaseout nuclear energy and fossil fuel, and to reduce GHG emissions. However, energy transition has not been mainstreamed in South Korea. Second, lack of financial support and investment is a primary barrier against energy transition. Compared to German feed-in tariff (FIT), South Korea currently does not have FIT to provide financial incentives to install more renewable energy sources. Third, insufficient renewable policy hinders energy transition. Renewable portfolio standard (RPS), for example, is in favor of large companies, limiting small investors in financing from banks. Third, weak renewable energy policy implementation agency is also a barrier to deploy renewable energy for sustainable energy security. In addition, the link between climate change mitigation and renewable energy adoption in Korea has not developed yet. National government highlights marketoriented reduction mechanism (such as emission trading system) rather than renewable energy deployment for climate change mitigation. These barriers resulted in low renewable energy supply (1.24%, as of 2015) of total primary energy supply, comparted to 12.49% of renewable energy mix in Germany.

The current Moon administration declared energy transition as national energy policy direction. The 3020 policy aims to raise the portion of renewable energy from 1.4 percent to 20 percent by 2030. Coal and nuclear energy portion in energy mix aims to be reduced to 22 percent and 21.6 percent respectively by the same due. The current South Korean government is receptive to the concept of energy transition. It would be significant opportunity for experts, civil society, and renewable energy industry to engage in energy transition policy making process.

Based on the identified problems of this study, we suggest following policy recommendations.

• Mainstream energy transition. The concept of energy transition is new to the public. It is critical to inform what it is, why it is important, and how we can achieve it. Debates, deliberative polls, participatory hearing and other public relations to persuade the public and stakeholder in energy arena would facilitate mainstreaming energy transition. Furthermore, mainstreaming strategy can emphasize co-benefits of energy transition including reducing particle matter from fossil fuel reduction.
• Provide financial supports. The feed-in-tariff scheme can provide stable incentives for renewable energy adoption. FIT is an effective measure to enhance small and medium sized renewable energy providers. National renewable energy fund would be to promote research, production, test, and deployment of renewable energy solutions.
• Establish an energy transition institution. Planning and implementing energy transition can be facilitated integrated energy transition institutions. An agency dedicated to energy transition is be to vision, frame, and implement policies and programs.
• Building up regional energy transition cooperation scheme. Countries in the East Asia do not have much experience of energy cooperation. Cooperation for energy transition can provide co-benefits of economic growth and environmental sustainability. Knowledge based cooperation scheme on energy transition can share success and failure of energy transition technologies and policies.

This study mainly focuses on the national level energy transition policies. Future research can highlight the importance of local level energy transition technologies and policies. Energy transition actually takes place in local areas (cities and community) with coordination of national policies. Particularly, cities become the centers of innovation in energy transition experiments. Cities are also forming transnational climate and energy governances. In the East Asian region, city networks including CityNet, C40 cities Climate Leadership Group, ICLEI-Local Government for Sustainability service their member technical and policy related information, provide discussion arena, and climate change and energy related standards to follow. How cities in Asia can cooperate in the topics of energy transition would be a good avenue for future research.

In addition, research can look at under what condition energy transition can achieve the proposed goals. To this end, future research can examine political economy, institutional setting, and technological development for successful energy transition in Asia. By doing this, countries in Asia and other regions can share the experiences of success and failure in energy transition process.