Page 12 - AsiaElec Week 38 2021

AsiaElec PRICES AsiaElec

South Korea to raise

power prices

SOUTH KOREA SOUTH Korea has blamed rising LNG, coal and KEPCO said in its statement that import
oil prices for its decision to raise retail power prices of LNG rose to KRW654.72 per kg in
prices by KRW3 ($0.0025) per kWh from Octo- August, from KRW601.85 per kg in July and
ber, its first such increase since 2013. KRW548.04 per kg in June, while imports prices
The Ministry of Trade, Industry and Energy of coal climbed to KRW158.93 per kg in August,
(MOTIE) said on September 23 that it had from KRW152.7 per kg in July and KRW141.76
allowed tightly regulated utility KEPCO to raise per kg in June
prices for the fourth quarter, meaning that an South Korea’s power networks were in danger
average four-member household could pay up in failing to meet demand during the summer,
to KRW1,050 ($0.89) per month more. with the difference between supply margin fall-
Coal-fired power plants account for about ing to a low of 10% this week.
40% of South Korea’s electricity mix, and LNG- Unused supply capacity fell to a low of 8.8
fired power plants are responsible for around GW, the Korea Herald reported, well under the
25%, making the country vulnerable to the cur- previous low of 10 GW seen in 2020.
rent movements in gas prices. The MOTIE indicated it would also raise
Nuclear accounts for around 30% of demand, domestic prices of natural gas later this year by
with the remainder being renewables. saying city gas prices had been frozen for a year
KEPCO’s rate changes comes as it has intro- and a half despite the hikes in import costs.
duced a new retail pricing system, which linked South Korea’s LNG imports jumped 20.8%
its tariffs to global fuel prices such as LNG, coal year on year to 30.64mn tonnes for the first
and fuel oil. eight months this year, compared with 25.36mn
This was an effort to improve profits, as pre- tonnes in the year-ago period, to meet stronger
viously tariffs had been fixed by the government, power demand driven by a heat wave and the
leading to losses in recent months. The new shutdown of several nuclear reactors.
system allows tariffs to be adjusted every three The South Korean government pledged in
months. October 2020 to aim for a net-zero economy by
This means that KEPCO could raise electric- 2050. The country produced 28.1% of its elec-
ity rates again in January next year if fuel costs tricity using coal in 2020, according to data from
stay strong, it said. the Energy Ministry.
“KEPCO’s fuel costs jumped by KRW10.8 However, it provided $127bn in support
per kWh in the fourth quarter from the previous for overseas oil and gas projects between 2011
quarter due to spikes in prices of LNG, coal and and 2020 as government-backed development
oil, but the company decided to raise by KRW3 finance institutions (DFIs) continued to back
due to concerns over financial burden on house- fossil fuels as the government talked up green
holds,” KEPCO said in a statement. energy.™

P12 www. NEWSBASE .com Week 38 22•September•2022