Looking for more information? Here’s everything you should need.
Amid deepening economic losses from coal plants, South Korea’s prolonged reliance on coal power could end...Read More
Report Launch Event
21 April | Online Energy Policy Seminar featuring Carbon Tracker Initiative, Smart Energy Network Design...Read More
"Phasing out coal power by 2028 is the most cost-effective choice for South Korea right now given its pursuit of carbon neutrality by 2050. And without quickly phasing out coal power, the country would struggle to raise its currently ‘highly insufficient’ NDC, which is aligned with catastrophic warming scenarios,” said Valeria Ehrenheim, CTI analyst and co-author of the report End in sight: how South Korea can force coal offline by 2028. “If South Korea sticks with current coal power plans, it will struggle to contain system costs as it falls behind other countries in the global trend of transitioning to clean energy and economic growth.”
A cost-optimized analysis for a renewables investment schedule for South Korea shows that a more ambitious rollout of renewable energy is feasible
In October 2020, President Moon Jae-in pledged to have South Korea achieve carbon neutrality by 2050. However, the country’s carbon-intensive power sector, with coal power accounting for approximately 40% of total electricity generation and a quarter of national emissions, remains a major obstacle to achieve this goal.
End in Sight finds the renewables rollout can be accelerated beyond current government plans, to reach 40% by 2028, and therefore, coal can be phased out earlier than planned.
Moreover, all coal power plants will be unprofitable before the end of their expected lifetimes even under current environmental policies and power market regulations.
High-level policy recommendations: levelling the playing field in the power market
Carbon prices should be introduced in conjunction with other measures, and are critical to achieving a successful coal phase-out:
- A renewables investment schedule as presented in section 2 of the report, coupled with a modernization of the power market, in order to allow a fair penetration of renewable energy sources in the system.
- Efficient implementation and integration of storage units in the power system, in order to secure the stability of the grid when paired to intermittent renewables.
A cost-optimized analysis for renewables investment schedule for South Korea shows that a more ambitious rollout of renewable energy is feasible, with 40 GW and 14 GW of solar and on-shore wind respectively by 2028, against 27 GW and 13 GW as proposed in the 9th Basic Plan. This would further support a speedier coal phase out.
All South Korean coal power plants will become unprofitable before the end of their planned operating lifetimes under current policies. The growing requirement for increased power system flexibility alongside tightening regulation means that even under existing policy, coal plant capacity factors will decrease, leaving units both operating and under construction unprofitable to run.
With our suggested renewables investment schedule and a carbon price regime, it is possible to phase out coal by 2028. This is the most cost-effective option for South Korea in its pursuit of 2050 carbon neutrality, allowing the power system to save $ 5.5 bn compared with a later phase-out scenario under a carbon tax regime and a standard renewables rollout plan. Moreover, a carbon price paired with policies promoting greater renewables penetration can deliver an even more effective change for the generation mix.
Most planned coal plant projects are projected to be unviable beyond 2030. This crunch point could be brought even further forward if spot power prices remain around current levels, or if a 2030 power sector emissions cap consistent with a 2050 net zero target is introduced.