[종합] Government “Expected to increase electricity bill by 10% by 2030”

According to the 9th Basic Plan for Power Supply and Demand, the government predicted to increase electricity rates by 10.9% compared to 2017. This is the same as the forecast made in the 8th power plan announced in 2017.

However, the government added that it is difficult to accurately predict the extent of electricity rate hikes due to increased uncertainty due to factors such as rapid expansion of new and renewable energy and reflection of environmental costs.

On the 24th, the Ministry of Trade, Industry and Energy held a public hearing on the 9th electric power plan, including the power generation facility plans for 15 years from this year to 2034, both online and offline.

According to the 9th Electric Power Plan, 30 coal power plants with 30 years of operation until 2034 will be abolished, and 24 of them will be converted to liquefied natural gas (LNG) power generation.

The seven coal power plants currently under construction will be completed as scheduled. Accordingly, the capacity of coal power plants will decrease from 35.8GW (58 units) this year to 29.0GW (37 units) in 2034.

In accordance with the principle of prohibiting new and extended life, the number of nuclear power plants will decrease to 17 units by 2034 after peaking at 26 units in 2022 when Shinhanul units 1 and 2 are completed. The facility capacity will be reduced from 23.3GW (24 units) at present to 19.4GW (17 units) in 2034.

The facility capacity of LNG power generation will increase from 41.3GW this year to 58.1GW in 2034, and the capacity of new and renewable energy facilities during the same period will increase by about four times from 20.1GW to 77.8GW.

According to this plan, the composition ratio by power generation source based on effective capacity in 2034 will be LNG (47.3%), coal (22.7%), nuclear power plants (15.5%), renewable energy (8.6%), and others (5.9%).

Compared to this year, LNG increases by 9.9 percentage points (P), renewables increase by 5.3 percentage points, coal decreases by 9.2 percentage points, and nuclear power plants decrease by 5.5 percentage points.

Along with this, the government will introduce’environmental dispatch’ and’coal capping system’ to achieve the goal of reducing greenhouse gas emissions in the conversion sector (1930,000 tons) by 2030.

Environmental dispatch is a method of first generating energy sources that minimize environmental costs, and is in contrast to the current’economic dispatch’, which considers economy as a top priority.

The government plans to implement environmental dispatch from next year in a way that reflects the cost of trading permits to the cost of generation. It is a structure that averages the cost of trading permits for one year and reflects it in the cost from next year.

The coal cap system imposes a limit on the annual coal power generation capacity of residual coal generators in line with the goal of reducing greenhouse gas emissions. This system will be implemented in 2022-2023 after revision of related laws.

The government plans to induce competition within the amount of coal power generation by introducing a price bidding system along with the coal cap system.

System limit price (SMP: power wholesale price) settlement system will also be improved.

It plans to diversify the market structure, introduce a price bidding system, and abolish the settlement adjustment factor that compensates for losses in coal and nuclear power in the long run.

The Ministry of Industry said, “It is difficult to predict quantitatively how much the electricity rate will increase at the present time because various factors act in a complex manner,” regarding the effect of environmental cost reflection on the electricity rate increase.

An official from the Ministry of Industry said, “However, the rate hike factors such as the introduction of environmental dispatch, reduction in coal power generation, and increase in LNG power generation are offset by the rate cut factors such as the implementation of the LNG individual rate system, and the increase is not far from the 10.9% increase until 2030, as suggested in the 8th power plan I don’t think I will.”

At the public hearing, there was an opinion that the construction of Shinhanul Units 3 and 4, which had been suspended in consideration of the development of the nuclear power plant industry, the local economy, and carbon neutrality, should be reflected in the supply and demand plan to resume construction and reconsider the nuclear power plant policy.

Regarding this, the 9th Power Plan Working Group explained, “For stable power supply, Shinhanul 3 and 4 units, which are uncertain, were inevitably excluded from the supply volume.”

He added, “Although nuclear power plants are relatively eco-friendly in terms of greenhouse gas emissions, it is difficult to see them as a fundamental alternative for carbon neutrality because there are problems with spent nuclear fuel, economic deterioration due to external costs, and public acceptance problems.”

In order to achieve the carbon-neutral goal in 2050, opinions have been raised that coal power generation must be further reduced, including the suspension of seven new coal generators under construction.

The Ministry of Industry and the Working Group said, “Through the abolition of old coal power generators and the coal cap system, it will be able to achieve without disruption,” and said, “It is practically difficult for the government to forcibly stop coal power generators under construction without the voluntary intention of the operator.”

Pointing out that expanding LNG power generation that emits carbon is not suitable for carbon neutrality, “It is inevitable to expand LNG power generation as an alternative power source for the time being due to the abolition of coal power generation and expansion of new and renewable energy.” “In the mid to long term, CCUS (carbon dioxide capture, storage, Utilization) and green hydrogen turbines, etc., will reduce carbon emissions.”

The Ministry of Industry and Industry plans to prepare a final electric power plan by reflecting the opinions from the public hearing on that day and hold the Electric Power Policy Council on the 28th to finalize it.