President Yoon Suk-yeol officially reversed the nuclear phase-out policy of his predecessor, former President Moon Jae-in, in a bid to resolve the controversy that is closely linked to electricity rates. Unfortunately, the dispute is flaring up again.
Shortly after the Moon administration was launched in 2017, the National Planning Committee was mapping out major policy plans, one of which was to phase out the country’s nuclear power plants.
The plan itself was fraught with uncertainty and risks, given that South Korea operates two dozen nuclear reactors, with their combined share of electricity generation standing at some 30 percent.
At the time, the Ministry of Trade, Industry and Energy submitted two reports to the National Planning Committee, saying that a nuclear phase-out would lead to a 40 percent increase in electricity rates by 2030, according to a report by a local media outlet.
In detail, the ministry’s reports projected that the nation’s total electricity bills would soar to over 75 trillion won ($60 billion) in 2030, up from 55 trillion won in 2016. They said that between 2018 and 2030 the total additional electricity charges incurred would reach a whopping 140 trillion won.
The members of the National Planning Committee reportedly ignored these warnings, expressing their displeasure at the reports, which were a significant dissenting voice to be taken seriously.
After silencing an objective projection within the government, the Moon administration pushed for the nuclear phase-out plan aggressively, as if shutting down nuclear power plants and forcing companies to use renewable energy would solve the fundamental energy problem in its push toward carbon neutrality.
As critics predicted, the nuclear phase-out plan did not work and the result was the need to drastically raise electricity charges to cover snowballing losses at the Korea Electric Power Corp., or Kepco, the state-run power firm.
After all, South Korea’s energy industry depends heavily on nuclear power, the cost competitiveness of which remains much higher than those of renewable sources such as solar and wind power.
The efficiency and economic scale of renewable energy and related technologies were improving, but the pace of progress was too slow to justify a massive shift from nuclear power generation to renewables.
The Moon administration not only ignored the apparent flaws pointed out by the two reports from the Trade Ministry, but also artificially rejected the much-needed electricity rate hike requests from Kepco in order to cover up the festering problem.
The timing could not be worse. As global energy prices continued to rise, Kepco’s balance sheet worsened. Its cumulative debt jumped by 34 trillion won during the Moon administration. In the first quarter of this year, Kepco’s loss came in at 7.8 trillion won, spooking investors both at home and abroad.
While the need for raising electricity rates was put on the backburner, Moon promoted his clean energy policy, pledging to slash Korea’s greenhouse gas emissions by 40 percent from the 2018 levels by 2030 and achieve carbon neutrality by 2050.
The goal was lofty, but the methods that Moon said he would deploy were shaky at best and utterly unrealistic at worst. He drew up a plan to create a hydrogen economy, even though he was shutting down nuclear power plants, which could be optimized for producing hydrogen.
The Moon administration also claimed that it would secure enough electricity by importing it from China and Russia, which was another unrealistic plan.
The dispute over the deliberate move to silence a dissenting voice should be taken as a bitter lesson to ponder for President Yoon Suk-yeol and policymakers of the current administration to avoid repeating the same policy mistakes.
By Korea Herald (email@example.com