[2021 국회에 듣는다] Gap-Seok Song (Democratic Party)

“Wolseong Unit 1, no more political war secrets”
Participation in KEPCO’s new and renewable business, a good opportunity for the private sector

[에너지신문] Gap-seok Song, secretary of the Small and Medium Venture Business Committee of the Ministry of Trade, Industry and Energy for the first half of the 21st National Assembly Last year, Congressman Song drew attention for his representative proposal of the’Electricity Business Act Amendment’, which allows KEPCO to directly operate a new and renewable energy power generation business. This paper asked Rep. Song Gap-seok for his views on the energy sector as a whole.

◆ It is pointed out that the early closure of Wolseong Unit 1 is the subject of political conflict.

The government announced its plan to close early Wolseong Unit 1 through the Energy Conversion Roadmap and the 8th Basic Electric Power Supply and Demand Plan, which were resolved at the State Council.

In order to implement the government’s policy, KHNP, the agency in charge of Wolsong Unit 1, made a decision to close it early after comprehensively evaluating the feasibility of continuing operation of the Wolsong Unit 1 in relation to the early closure of the Wolsong Unit 1, such as the stability of power supply and demand, economy and regional acceptance. In the case of economic evaluation, which is a problem in the opposition party, economic feasibility was evaluated through the service of an external accounting firm to secure reliability and objectivity.

The board of directors of KHNP also decided to close the Wolsong 1 unit early on June 15, 2018, including the prospect of low utilization rate of the Wolsong unit 1 reflecting the reinforced regulatory environment and the possibility of delay in restarting when a breakdown → shutdown, and uncertainty of profits. Is a comprehensive consideration. In fact, the utilization rate of Wolseong Unit 1 was only 40.6% as of 2017, which is less than half.

In the end, I would like to say once again that the government and KHNP decided to close it early based on the overall results, such as the safety problem of Wolseong Unit 1 and the decrease in utilization rate.

Despite the government’s legitimate policy and reasonable judgment that the decision to extend the lifespan itself was ruled by the court as illegal, the reckless political offensive against the early closure of Wolsong Unit 1 continues. The decision to close early Wolseong Unit 1, which was decided on the basis of accurate data and related grounds, should no longer become a political battle.

◆ Businesses are protesting against KEPCO’s participation in the new and renewable energy power generation business.

We are well aware of concerns related to the revision of the Electricity Business Act and are listening to various opinions. Through this, KEPCO is pursuing a direction to limit KEPCO’s direct participation in renewable power generation to projects that require KEPCO’s own technology, such as large-scale offshore wind power.

It is true that the offshore wind power projects in Sinan and Southwest Sea have not progressed smoothly over the past decade. If KEPCO becomes a leading investor in large-scale businesses and creates a market ecosystem such as building joint access facilities, it will provide good business opportunities to private businesses as well.

Large-scale projects such as offshore wind power must be reviewed along with power generation projects, as well as support for the development of port hinterland complexes and expansion of domestic supply chains, and related projects to properly utilize the generated electricity, such as the green hydrogen business, so KEPCO’s participation in comprehensive business planning capabilities I believe it is necessary.

In particular, if KEPCO’s technological prowess and financing capabilities are utilized, it will return to the benefits of all the people, such as reduction in power generation costs and electricity bills. Of course, to this end, we need to improve related systems such as fulfilling RPS obligations and restricting REC transactions so that there is no decline in REC prices, which is a concern for private renewable power generation companies.

◆ I would like to hear your opinion on the direct introduction of natural gas.

The direct introduction system reflects changes in the natural gas market environment. It is a system aimed at promoting competition within the industry by expanding fuel options and easing regulations for mass consumers.

The domestic natural gas market is divided into a regulated area supplied by the Gas Corporation, a wholesale business, to retail businesses (city gas), and a non-regulated area that directly imports natural gas for the purpose of self-consumption for power generation and industrial use.

In particular, direct introduction of self-consumption allows importation for the purpose of self-consumption, so the law strictly restricts sales to third parties in Korea, except in some circumstances. The reason why the wholesale/retail business and the direct import area of self-consumption are clearly distinguished is to ensure the foundation so that each business operator can operate stably in each area.

However, contrary to this purpose, some large corporations, which are direct importers, are operating to domestic gas demanders through overseas subsidiaries that are not subject to domestic laws. It has established a subsidiary overseas, signed an LNG supply contract, and is carrying out a substantial wholesale and retail business by leasing storage facilities owned by the company and supplying it to Korea.

The business targets of large corporations are mainly small and medium-sized domestic businesses that do not have the ability to promote direct import. If the business is directly imported through a bypass wholesaler, uneconomical small-scale direct import can be mass produced. Furthermore, it may cause problems such as business deterioration due to infringement of the business area of local city gas companies.

If expedient business practices continue, the natural gas market could become an oligopoly by some conglomerates. As this is an unfavorable behavior in the national economy as a whole, it is necessary to take measures by relevant ministries and institutions to eradicate the bypass wholesale business.

◆ How to establish a correct hydrogen ecosystem?

To create a competitive corporate ecosystem, the government plans to foster 500 hydrogen-specialized companies by 2030 and 1000 by 2040. In order to foster a specialized hydrogen company, the’hydrogen material, parts and equipment project’ is being promoted in five major fields, including hydrogen mobility, fuel cells, liquefied hydrogen, hydrogen charging stations, and water electrolysis.

We are conceiving a plan to expand’innovation procurement’ for the active participation of local governments and public institutions for the newly launched excellent technology products in the hydrogen field. In addition, it will revitalize the hydrogen ecosystem by promoting entry of new companies into the hydrogen market through the ’34 billion won hydrogen economy fund’.

As the Korean New Deal is represented by the’Regional Balanced New Deal’, we will also consider ways to foster local ecosystems. The plan is to install medium-sized hydrogen production bases in four regions (Gyeongnam, Honam, Jungbu, and Gangwon), build 40 small-scale hydrogen production bases by 2025, and establish a stable hydrogen infrastructure.

We will create a regional ecosystem through organic linkages of hydrogen clusters (hydrogen companies and research institutes continue to create innovation), special regulatory zones (new hydrogen technology, new business demonstrations), and hydrogen cities (distribution of life-type hydrogen infrastructure). After reporting and confirming the results of regular evaluations and results of hydrogen economy will and capacity by local governments, we will strengthen financial support, such as expanding government project support, to excellent local governments.

◆ Please rate the policy to revitalize the hydrogen economy.

With the depletion of oil, a fossil fuel, and an abnormal climate caused by greenhouse gases, the government prepared and announced the’Hydrogen Economy Revitalization Roadmap’ in January of last year with the goal of becoming the world’s best leading hydrogen economy. According to the roadmap, by 2040, an annual added value of 43 trillion won and 420,000 new jobs will be created, and an annual reduction of 10 million tons of carbon emissions is expected.

Currently, Korea has the world’s best hydrogen technology, and based on this, we are making efforts to build infrastructure by producing more than 6.2 million hydrogen cars and expanding 1,200 hydrogen charging stations. As a result, the domestic supply of hydrogen cars has increased significantly from 177 in 2017 to 7600 as of the end of June 2020.

In the energy sector, the fuel cell for power generation, which is an eco-friendly distributed power source that does not emit carbon dioxide at all and can be installed on a small scale in urban areas, will be expanded to more than 15GW by 2040 by linking with hydrogen production. Fuel cells for homes and buildings are also expected to be distributed to about 940,000 households with 2.1GW by 2040. In addition, the unit price of hydrogen is also expected to be reduced to 3,000 won per kg according to the development of production technology.

As such, I think the Korean government is doing its best to produce and supply hydrogen economically and stably.

◆ About the role of public enterprises established for the purpose of developing oil and resources.

Corona 19 is changing the business environment of state-owned oil companies in Asian countries. It is changing rapidly toward increasing domestic development and investment so that profits can be realized within a short period of time, but to smoothly supply oil and gas to the people.

Korea has also been producing natural gas at the Donghae Gas Field since 2004, led by the Korea Petroleum Corporation, and if the technology obtained at this time is put into the development of the domestic continental shelf, which has not yet been explored, it will be a great help in revitalizing the economy as well as a stable supply of resources.

In addition, I think it is a way to stably supply petroleum to the people by reviewing and advancing, focusing on projects that can directly import petroleum produced abroad, such as the UAE block.

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