Utility prices are too cheap

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Utility prices are too cheap

During an international seminar on bio-civilization at Konkuk University, a scholar from Switzerland specializing in photosynthesis displayed a photo of a plant that grows in alpine zones. It appeared to look like kelp. He said the plant inspired a solar photovoltaic net that can absorb more sunlight more easily than a hard cell panel when mounted on a rooftop. Research and development of biomass renewable energy is in fashion in Switzerland. Intense activity and research was motivated by a dramatic change in state energy policy, he explained.

Switzerland, which largely relies on imports, has a similar manufacturing structure to that of Korea. It is also highly dependent on nuclear reactors to power its industry. But last year, the Swiss government adopted a potentially risky energy policy: It decided not to build any more new nuclear reactors. Decades from now, reactors will be entirely gone. Switzerland has distinct features of direct democracy, deferring to popular referendums for major policy decisions. Since the meltdown at the Fukushima nuclear complex in Japan after earthquakes and a tsunami, the Swiss government decided to abandon plans to build new reactors and not replace five existing ones when their life span is over. The decision was made with a public consensus. The policy triggered a race toward development of efficient and renewable energy sources.

Electricity is like food. If a cheap and easily accessible restaurant is nearby, we become regulars. Refrigerators and fast food are pointed out as the culprits for modern-age obesity. Electricity consumption is no exception. Our utility bill is just half of the average cost of European Union members, but consumption is double. Household consumption has dropped slightly due to a progressive fee system, but the industrial sector has an insatiable appetite. Because power costs are cheap, manufacturers do not see the need to conserve. The supply structure is also too simple. Electricity is served at a uniform package price. There is no menu for different energy sources at different prices.

Under the current power price and supply structure, Korean society can never be energy-smart, argues Moon Seung-il, a professor of electrical engineering at Seoul National University and local pioneer in the development of a smart grid. There’s no need to install expensive renewable energy grids when power is so easily accessible and cheap. Shop owners do not have to fuss about closing doors and windows when air conditioners are on. In order to save energy and money, one must register for different utility fees according to the season and time of day, but few want to go through the trouble. Even when warned of a blackout, few are seriously concerned.

Moreover, obvious problems went unattended. Yang Soo-gil, who twice headed the Presidential Committee on Green Growth, blamed the political element of electricity. He repeatedly called for a drastic revamp of the power supply system in order to accelerate growth based on green energy, but was met by opposition from the staff of the presidential economic team and at economy-related government offices. They worried about the repercussions on consumer prices and economic growth. They agreed with the reasoning but said the timing was not right. That excuse has been given for several years. Meanwhile, deficits widened, the green industry was discouraged and society went on with its gluttonous consumption of electricity.

A recent release of a state energy draft that scaled down the share of nuclear power in energy sources raised an uproar. Some newspapers estimated that utility fees could go up as much as five-fold and that manufacturers would have to shut down. But the energy policy outline was in line with the general global trend. It did not suggest going as far as Switzerland to allow nuclear reactors to naturally die out, but only to slightly reduce Korea’s present heavy reliance on nuclear power. But the energy policy outline didn’t give any guidance on fixing the country’s excess consumption. We need a debate, go on a diet and overhaul the collective distribution system. We have to promote creativity and innovation in the energy industry as well.

I looked for somewhere to eat around the school after the impressive lecture by the Swiss scholar. The streets were bright with restaurant signs. A tiny corner shop selling mobile phones had more than 10 fluorescent lights burning. I checked my wristwatch for the time. It was noon.
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