-- Swift implementation of the South Korean government's plans to diversify energy supply with more renewables amidst a global energy crisis could help South Korea strengthen energy security, the Institute for Energy Economics and Financial Analysis said on Thursday.
Earlier this week, the government rolled out a roadmap to increase power generation from renewables to 20%, deploy 100 gigawatts of renewables by 2030, and move away from gas-based thermal energy to renewable heat sources.
The government also seeks to make the national grid more distributed and flexible and aims to position South Korea as one of the world's top three leaders in green technology manufacturing.
"Rapid implementation of the proposed transition roadmap would help enhance price stability and strengthen energy access. Without this action, South Korea will remain exposed to supply disruptions and volatile energy costs, with significant implications for its economic security," IEEFA analysts said.
South Korea's vulnerability to fossil fuel dependence has been exposed by the Iran war, which has resulted in energy supply disruptions and a significant surge in prices, IEEFA said.
The South Korean government has recently adopted several emergency measures to combat price spikes and supply disruptions and meet energy demand. These include capping fuel prices, seeking alternative oil and gas supply sources, and a temporary waiver in coal generation limits.
The government has also sought to accelerate the restart of five nuclear reactors, with two already resuming operations and the others slated to restart next month.
"Without decisive action to diversify energy sources and improve energy use, the country's energy security and economic stability will remain vulnerable," IEEFA analysts said.
South Korea relies on imports for about 97% of its energy requirements and is among the largest importers of oil, liquefied natural gas and coal in the world.
The Middle East accounts for 70% of its crude oil and 20% of its liquefied natural gas supplies. Last year, South Korea procured about 7 million metric tonnes or 14.9% of its total LNG imports from Qatar alone.
The country relies on coal and natural gas for about 58% of its total electricity generation, with nuclear accounting for 31% and renewables around 10%.
According to IEEFA, while solar and wind energy costs in the country are 80%-250% higher than global averages, the levelized cost of electricity for solar and onshore wind is still competitive with, and in some cases lower than, the marginal fuel costs of LNG gas-fired power generation.
"By expediting renewable energy deployment, removing structural barriers, and enabling investment at scale, South Korea can reduce its exposure to volatile global markets while strengthening its fiscal position and long-term energy security," IEEFA analysts said.