Energy policy needs to changeKorea Electric Power Corporation (Kepco), a state utility company, reported its unconsolidated operating losses of a whopping 629.9 billion won ($529.8 million) in the first quarter. Its losses increased amid a jump in imported fuel costs that the utility firm had been forced to increase in line with the liberal Moon Jae-in administration’s policy to reduce the share of nuclear reactors. The loss could have been cut if it had not hurriedly closed the Wolseong 1 reactor before it was scheduled to.
Kepco is structured to continue to lose money for some time, as the government is refusing to reconsider its policy of phasing out nuclear reactors across the country. The utility firm is being pressured to increase the amount of power it is generating from costlier renewable solar and wind sources instead of cheap nuclear fuel. The cost of imported fuel has also become expensive due to higher crude prices and the depreciation of the won. To stay afloat, Kepco must raise its electricity bills.
The answer is clear: The government must exercise flexibility rather than cling to Moon’s campaign promise. France put off a plan to reduce its share of nuclear power plants. It had pledged to cut its reliance on nuclear fuel for its power supply from current 75 percent, to 50 percent by 2025. It pushed back the plan to 2035 in order to meet international commitments to cut emissions. In a recent report, consulting company Deloitte advised the European Union to keep its reactor share to 25 percent to achieve its emission reduction goal by 2050. Its share is higher than Korea’s current 23 percent on nuclear power in the energy mix. Japan reversed its plan to shut down reactors after the Fukushima disaster and has reactivated reactors.
Even Germany, which Korea benchmarked for its energy transition policy, has been regretting its high energy costs as a result of going nuclear-free. Der Spiegel recently issued a special report highlighting the problems in Germany’s costly energy. Local residents are protesting the environmental costs for building windmills, their neighborhoods becoming ugly and skyrocketing electricity bills as a result of the swift phase-out of nuclear power. Similar problems have appeared in Korea. Residents have been rallying against proliferation of solar modules and wind turbines.
The government’s stubbornness could only backfire, as the public will enraged if they get bigger electricity bills as a result of its bold energy policy. President Moon recently indicated that the minimum wage does not need to be increased to 10,000 won by 2020, as he promised in his campaign. He must employ practicality and flexibility on energy policy as well.
JoongAng Ilbo, May 15, Page 30