Carbon plan to increase electric bills by 3,000 wonThe government’s decision last Tuesday to start a carbon-emission trading system next year will increase regular households’ monthly electricity bills by about 3,000 won ($2.90) for the next three years, according to data from the Korea Electric Power Corporation (Kepco).
The price will increase because Kepco’s power generating affiliates will have to buy extra carbon credits due to the massive amount of emissions from power plants, according to Kepco data submitted to the National Assembly’s trade, industry and energy committee and released by committee member and Saenuri Party lawmaker Lee Che-ik yesterday.
The carbon emission trading system will run a trial period from January through 2017.
According to Lee’s statement, Kepco’s affiliates will have to buy carbon credits worth about 400 billion won per year. This will require Kepco to collect about 1.3 trillion won more through its customers’ power bills by 2017.
The Kepco data was based on a household’s average monthly electricity bill of 30,290 won last year. The state-run electricity company estimated that households will see a 2,520 won price hike next year, another 3,120 won hike in 2016 and a 3,720 won hike in 2017.
The data included the cost of the extra carbon credits that the generators will need to purchase as well as the cost of constructing extra facilities to generate renewable energy.
The carbon trading system puts a cap on each industry’s maximum emissions, so companies that emit less carbon than the quota can sell their unused credits to other companies, while those that emit more must purchase carbon credits to stay in operation.
The government stated last week that one ton of carbon dioxide will be traded for 10,000 won.
Kepco will have to pay for the extra credits that its four affiliates will need. Those four companies are responsible for generating electricity by burning coal and liquefied natural gas.
The four power generators estimated they will emit a total of 835.2 million tons of CO2 by 2017, but their carbon quota allows them to emit only 704 million tons over that period. So Kepco must buy extra credits for which it will need to raise 1.3 trillion won by 2017 by increasing electricity prices.
The carbon trading system also stipulates that companies surpassing their emission limits and failing to find available carbon credits in the market will be fined by the Ministry of Environment in proportion to the amount of excess emissions. The Environment Ministry can fine each company up to 100,000 won for every ton that surpasses the limit.
According to the Federation of Korean Industries in July, Kepco could face fines of about 13.8 trillion won, the highest among Korea’s major industries.
BY KIM JI-YOON[email@example.com]