South Korea Power Report Q1 2012
Includes 3 FREE quarterly updates
BMI View: Japan’s nuclear woes following the 2011 earthquake and tsunami appear to have done little to derail South Korea’s plans to build a number of new reactors and to increase its dependence on nuclear energy. Renewables are another key part of the country’s future energy policy, and both elements of the overall strategy should reduce carbon emissions and the country’s dependency on imported fuels.
While coal- and gas-fired power stations will remain a vital part of the energy mix for decades to come, South Korea is looking to reduce dependence on costly imported gas. It also wants to cut the level of emissions from the large number of coal-, oil- and gas-fired sites, so has little choice but to embrace nuclear. The pursuit of renewables will help, but growth begins from a low base.
Key trends and recent developments in the South Korean electricity market include: During 2011-2016, South Korea’s overall power generation is expected to increase by an annual average of 3.64%, reaching 563TWh. Driving this growth is an annual 5.4% gain in nuclear generation and a 14.9% increase in renewables use, augmenting a 3.8% average rise in gas-fired electricity supply.
In a bid to meet growing electricity demand, the South Korean government has announced plans to invest KRW49trn (US$42.6bn) in the country’s power generation capacity by 2024. The government’s planned investment will focus on 14 nuclear power plants. South Korea is looking to gradually reduce its dependency on fossil fuels and increase investment in cleaner energy sources, according to Reuters.
Following an expected increase in 2011 real GDP of 3.1%, BMI forecasts average annual growth of 4.0% between 2011 and 2021. The population is expected to rise from 48.4mn to 49.3mn during the period to 2016, but net power consumption looks set to increase from 457TWh to 539TWh. During 2011-2016 the average annual growth rate for electricity demand is forecast at 3.5%, with this expected to slow somewhat later in the decade to average 3.2% over 2016-2021.
Despite a forecast rise in net generation, growth of which broadly matches the underlying demand trend, South Korea has a potential power supply shortfall that could rise over the near term. However, we note that his could reverse later in the decade as new nuclear and renewables capacity is introduced. A stable percentage of transmission and distribution losses, at around 3.9%, will do little to help balance the market. The theoretical net import requirement of 3.4TWh could become a modest export capability by 2016, and exports could reach 5.5TWh by 2021.
South Korea’s biggest companies, which account for 30% of total power consumption, in November 2011 made voluntary pledges to cut power use by 5% a year to help conserve energy. Representatives from 12 industry associations, including steel and petrochemicals, met with ministers to declare their commitment to save energy. State-run power provider Korea Electric Power Corporation (Kepco) imposed rolling blackouts in September 2011.
BMI View: Japan’s nuclear woes following the 2011 earthquake and tsunami appear to have done little to derail South Korea’s plans to build a number of new reactors and to increase its dependence on nuclear energy. Renewables are another key part of the country’s future energy policy, and both elements of the overall strategy should reduce carbon emissions and the country’s dependency on imported fuels.
While coal- and gas-fired power stations will remain a vital part of the energy mix for decades to come, South Korea is looking to reduce dependence on costly imported gas. It also wants to cut the level of emissions from the large number of coal-, oil- and gas-fired sites, so has little choice but to embrace nuclear. The pursuit of renewables will help, but growth begins from a low base.
Key trends and recent developments in the South Korean electricity market include: During 2011-2016, South Korea’s overall power generation is expected to increase by an annual average of 3.64%, reaching 563TWh. Driving this growth is an annual 5.4% gain in nuclear generation and a 14.9% increase in renewables use, augmenting a 3.8% average rise in gas-fired electricity supply.
In a bid to meet growing electricity demand, the South Korean government has announced plans to invest KRW49trn (US$42.6bn) in the country’s power generation capacity by 2024. The government’s planned investment will focus on 14 nuclear power plants. South Korea is looking to gradually reduce its dependency on fossil fuels and increase investment in cleaner energy sources, according to Reuters.
Following an expected increase in 2011 real GDP of 3.1%, BMI forecasts average annual growth of 4.0% between 2011 and 2021. The population is expected to rise from 48.4mn to 49.3mn during the period to 2016, but net power consumption looks set to increase from 457TWh to 539TWh. During 2011-2016 the average annual growth rate for electricity demand is forecast at 3.5%, with this expected to slow somewhat later in the decade to average 3.2% over 2016-2021.
Despite a forecast rise in net generation, growth of which broadly matches the underlying demand trend, South Korea has a potential power supply shortfall that could rise over the near term. However, we note that his could reverse later in the decade as new nuclear and renewables capacity is introduced. A stable percentage of transmission and distribution losses, at around 3.9%, will do little to help balance the market. The theoretical net import requirement of 3.4TWh could become a modest export capability by 2016, and exports could reach 5.5TWh by 2021.
South Korea’s biggest companies, which account for 30% of total power consumption, in November 2011 made voluntary pledges to cut power use by 5% a year to help conserve energy. Representatives from 12 industry associations, including steel and petrochemicals, met with ministers to declare their commitment to save energy. State-run power provider Korea Electric Power Corporation (Kepco) imposed rolling blackouts in September 2011.
Contents
Executive SummarySWOT Analysis
South Korea Power SWOT
Global Industry Overview
Slower Growth In Developed Markets To Accentuate Differences
Regional Industry Overview
Asia To Remain Global Outperformer Despite Some Headwinds
Industry Forecast Scenario
South Korea Snapshot (Macro)
Table: South Korea Economic & Demographic Data
Table: Country Snapshot: Power Sector
South Korea Forecast Scenario
Electricity Generation And Power Generating Capacity
Table: South Korea Total Generation Data And Forecasts, 2009-2016
Table: South Korea Total Generation Long-Term Forecasts, 2014-2021
Table: South Korea Electricity Generating Capacity Data And Forecasts, 2009-2016
Table: South Korea Electricity Generating Capacity Long-Term Forecasts, 2014-2021
Electricity Consumption
Table: South Korea Total Consumption Data And Forecasts, 2009-2016
Table: South Korea Total Consumption Long-Term Forecasts, 2014-2021
Transmission And Distribution, Imports And Exports
Table: South Korea Electric Power Transmission And Distribution Losses Data And Forecasts, 2009-2016
Table: South Korea Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2014-2021
Trade
Table: South Korea Trade Data And Forecasts, 2009-2016
Table: South Korea Trade Long-Term Forecasts, 2014-2021
Key Policies/Market Structure
Regulation And Competition
Pricing
Key Projects Database
Table: South Korea Major Projects – Power Plants And Transmission Grids
Business Environment
Asia Regional Power Risk/Reward Ratings
Table: Asia Power Risk/Reward Ratings (Scores Out Of 100)
South Korea Power Risk/Reward Ratings
Rewards
Risks
Competitive Landscape
Korea Electric Power Corporation (Kepco)
K-Power
GS Electric Power Services (GS EPS)
POSCO Power
Company Monitor
Korea Electric Power Corporation (Kepco)
Glossary Of Terms
Table: Glossary of Terms
Methodology And Sources
Industry Forecasts
Power Industry – Data Methodology
Generation and Consumption Data
Electricity Generation Capacity Data
Power Risk/Reward Ratings Methodology
Table: Power Risk/Reward Indicators
Sources Skip to top