No dawdling on energy price hikeThe country is bracing for an unusually cold winter accompanied by the heightened risk of power outages as electricity demand continues to grow. Industrial consumption of electricity, which accounts for up to 60 percent of the country’s total usage, rose more than 9 percent on-year due to brisk exports.
Last winter, the country’s energy usage hit record highs due to the cold, and a colder winter has been forecast this year that could lead to rolling blackouts in some regions.
The government, together with the state-run Korea Electric Power Corporation (Kepco), has been expanding power facilities based on various economic growth models, but Korea cannot expect supply to rise until new power grids are completed in 2014.
The brewing energy crisis stems from excessive demand coupled with cheap utility prices. Manufacturers have been using electricity like water due to the cheap rates, and households have switched from other sources of fuel to electricity to provide heating as it is cheaper.
But until the new facilities are up and running, the public is going to have to find a way to endure three winters and two summers with the current level of supply.
The Kepco board recently approved a decision to hike power rates by 10 percent, a seemingly inevitable measure that the government is nonetheless opposing for fear of fueling inflationary pressure.
In order to prevent a major energy crisis, the government must increase the number of nuclear reactors in the long run, shift to a smart grid system and encourage the use of oil for household heating systems. Even more urgently, power rates should be raised. Campaigns to conserve energy and dress warmly are mere Band-Aids on a larger problem.
A blackout during the depths of winter would be quite troublesome. Those in the farming and fisheries industries would see their perishable produce freeze and elderly people in poorer neighborhoods could freeze to death.
As there is no immediate relief likely to be found on the supply side, solutions must be sought in terms of trimming demand - and this means raising prices. Industrial rates should be the first to be hiked, with consumer prices modified according to time and demand.
This is no time to shy away from energy issues. Regardless of next year’s elections, authorities must explain to the public the necessity of energy price hikes. And they must act fast in implementing them to avoid a disastrous winter.