Cutting coal plants and taxing diesel may backfire

With fine dust at choking levels, there are calls for a reduction in power plants fueled by coal and a hike in taxes on diesel fuel to discourage dirty methods of transportation.

But such measures could backfire.

The Ministry of Trade, Industry and Energy announced Wednesday it will close six aging coal power plants by 2022, three years earlier than originally planned. It will also expand the range of coal plants that will have their operations curtailed when the government issues a fine dust warning. The list, which originally affected 40 plants, was extended to all 60 plants in the country Wednesday.

Coal plants will conduct more maintenance operations in spring to reduce their hours when fine dust levels are at their highest during the year.

Yet coal power plants are the largest sources of Korea’s power. Unlike solar and wind-powered plants, coal plants are unaffected by weather conditions in generating electricity (as are nuclear plants).

Korea’s coal power plants currently have the capacity to generate 36,031 megawatts per year, which accounts for 28.6 percent of all power generated in the country. That figure is projected to reach 40,241 megawatts by 2022.

Its proportion is set to decrease. Coal power plants actually accounted for 45.3 percent of total output in 2017 when several nuclear plants were not in operation. The projection for 2030 is 36.1 percent.

But even then, coal is also expected to remain the country’s biggest energy production source.

The government wants to replace coal plants with liquefied natural gas (LNG)-powered plants to reduce fine dust emission levels. But LNG plants are not as efficient and will lead to higher electricity bills. It is uncertain whether the public would accept paying higher electric fees in exchange for less coal power.

“It is possible we could raise electricity bills by converting our power production from coal to LNG,” said the Trade Ministry Vice Minister Cheong Seung-Il in a January briefing.

The government is also contemplating raising taxes of diesel fuel as a means to control emissions from diesel cars, which it believes is responsible for 22 percent of fine dust produced in the Seoul metropolitan area. But the tax hike could hurt the economically vulnerable working class, including self-employed people.

Although many think of diesel vehicles being luxury cars like BMWs or Mercedes-Benzes, 80 percent of diesel fuel consumed in the country is used up by transportation service providers like deliverymen or trucks. Hiking diesel taxes will inevitably affect their business costs.

Some analysts criticize the government’s approach to the matter.

“The government is reducing its own options by blaming the dust crisis solely on China, diesel cars and coal plants,” said Lee Duck-hwan, a chemistry professor at Sogang University. “What made it especially more difficult to find solutions was its announcement of the phase-out of nuclear power.”

BY SOHN HAE-YONG [ko.juntae@joongang.co.kr]