Newsletter 22 April 2024
The 2024 South Korean parliamentary election and its energy policy implications
The 2024 South Korean Parliamentary election, with a voter turnout of 67%, has led to a significant reshuffling of the National Assembly's composition, reflecting the public's assessment of the current administration and their expectations for the future.
The election results indicate a notable shift in the political landscape:
𝐃𝐞𝐦𝐨𝐜𝐫𝐚𝐭𝐢𝐜 𝐏𝐚𝐫𝐭𝐲 (𝐃𝐏): With a total of 175 seats, up by 19 from 2023, the DP has secured a decisive majority. This increase in seats underscores the public’s support for their agenda, especially regarding energy transition and socio-economic reforms.
𝐏𝐞𝐨𝐩𝐥𝐞 𝐏𝐨𝐰𝐞𝐫 𝐏𝐚𝐫𝐭𝐲 (𝐏𝐏𝐏): The ruling PPP has experienced a slight decrease, now holding 108 seats, six less than before. This suggests that while they remain a significant force, there is a clear indication from the public for the need to reassess their policies and approach.
𝐑𝐞𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐊𝐨𝐫𝐞𝐚 𝐏𝐚𝐫𝐭𝐲 (𝐑𝐊𝐏): The RKP’s impressive gain, from one seat to 12, suggests a burgeoning support for their platform, which might introduce a new dynamic into the legislative process, especially in forming alliances for policy-making.
𝐓𝐡𝐞 𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧 𝐨𝐮𝐭𝐜𝐨𝐦𝐞 𝐢𝐬 𝐩𝐚𝐫𝐭𝐢𝐜𝐮𝐥𝐚𝐫𝐥𝐲 𝐢𝐦𝐩𝐚𝐜𝐭𝐟𝐮𝐥 𝐟𝐨𝐫 the 𝐞𝐧𝐞𝐫𝐠𝐲 𝐩𝐨𝐥𝐢𝐜𝐲
Democratic Party (DP)
𝐑𝐞𝐧𝐞𝐰𝐚𝐛𝐥𝐞 𝐄𝐧𝐞𝐫𝐠𝐲 𝟑𝟓𝟒𝟎 𝐏𝐥𝐚𝐧: The DP's commitment to the '3540' renewable energy plan signals a push towards increasing the share of renewable energy to 40% by 2035.
𝐎𝐟𝐟𝐬𝐡𝐨𝐫𝐞 𝐖𝐢𝐧𝐝 𝐏𝐨𝐰𝐞𝐫 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭: The DP aims to streamline the bureaucratic process to fast-track the deployment of offshore wind power.
𝐑𝐞𝐧𝐞𝐰𝐚𝐛𝐥𝐞 𝐄𝐧𝐞𝐫𝐠𝐲 𝐏𝐫𝐨𝐜𝐮𝐫𝐞𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐒𝐮𝐩𝐩𝐨𝐫𝐭: Proposes creating an 'RE100 industrial complex' and supports initiatives for corporate transitions to 100% renewable energy sources.
People Power Party (PPP):
𝐁𝐚𝐥𝐚𝐧𝐜𝐞𝐝 𝐄𝐧𝐞𝐫𝐠𝐲 𝐌𝐢𝐱: The PPP's approach involves a mix of nuclear and renewable energy sources, advocating for energy security and sustainability.
𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐑𝐞𝐟𝐨𝐫𝐦𝐬 𝐚𝐧𝐝 𝐆𝐫𝐞𝐞𝐧 𝐇𝐲𝐝𝐫𝐨𝐠𝐞𝐧: Calls for regulatory changes to aid renewable energy expansion and a strategy to lead in the green hydrogen economy.
The 2024 elections have set the stage for what could be a transformative period for South Korea’s energy policy. The new distribution of power in the National Assembly will undoubtedly influence the direction and pace at which South Korea pursues its renewable energy goals and addresses the global call for climate action.
A refresher about the current 10th Basic Plan (2022-2036)
The 10th Basic Plan for Electricity Supply and Demand established a strategic energy mix aimed at balancing economic, environmental, and security goals by 2036.
The targets were set as follows:
Nuclear power:
34.6% to maintain a stable base-load energy supply while addressing safety and environmental concerns.
Coal:
Reduced to 14.4%, reflecting global trends towards less carbon-intensive energy sources.
Liquefied Natural Gas (LNG):
9.3%, used primarily as a flexible and cleaner alternative to coal.
Renewable energy:
30.6%, significantly increased to capitalise on advancements in technology and decrease reliance on imports.
(14.3 GW offshore wind by 2030)
Hydrogen and Ammonia:
7.1%, highlighting innovation in new energy sources.
Other energy sources:
4.0%, including emerging and miscellaneous technologies.
The delayed 11th Basic Plan (2024-2038)
As South Korea prepares to introduce the 11th Basic Plan for Electricity Supply and Demand (“11th Basic Plan”), it is crucial to consider both the geopolitical landscape and internal policy shifts that could influence its strategic directives.
Geopolitical landscape:
Recent conflicts in the Middle East have highlighted the vulnerabilities associated with South Korea's dependence on imported energy sources like LNG and oil. These events underscore the importance of diversifying energy sources and enhancing energy security to mitigate risks associated with geopolitical unrest. The escalation of tensions not only affects global energy prices but also prompts a reevaluation of national energy strategies to ensure stability and sustainability.
Impact of global energy trends:
Global trends towards decarbonisation and increased use of renewable energy sources are reshaping energy policies worldwide. As a signatory to international climate commitments, South Korea is under increasing pressure to reduce its carbon footprint and transition towards more sustainable energy sources. This global shift impacts domestic policy, pushing for a faster adoption of renewables and reducing reliance on fossil fuels.
Domestic political shifts:
The recent general elections have led to a significant shift in the legislative landscape, with the Democratic Party gaining a majority. This change is likely to influence energy policy, given the party's strong advocacy for renewable energy and environmental sustainability. The new political configuration may accelerate legislative support for initiatives like the RE100, aiming to make businesses 100% reliant on renewable energy.
Legislative timelines and constraints:
The 21st National Assembly's term ending on May 30, 2024, imposes a tight timeline for deliberations and approvals of the 11th Basic Plan. This limited window necessitates efficient policy review and decision-making processes to ensure timely implementation. The urgency is compounded by the need to align new policies with both national goals and global energy trends.
Implications for the nuclear and renewable energy mix:
The outcome of the 2024 general election has catalysed a policy shift, with the new majority possibly influencing the scale of nuclear projects. Despite the government's initial plan to maintain and expand nuclear facilities, the prevailing sentiment within the National Assembly potentially favours a scaled-back approach, prioritising renewable over nuclear expansion.
Latest Energy Balance for South Korea
*Source KEEI, April 2024
From the energy balance we note that the electric power generation was 54,212 GWh.
Coal: 33.2%
LNG: 29.4 %
Nuclear: 27.6 %
Renewables & Hydro: 9.6 %
Petroleum: 0.2 %
The electricity generated in January 2024 was supplied to:
Industry: 48.1 %
Commercial & Public: 36.7 %
Residential: 14.3 %
Transport: 0.9 %
ER-MARINE, your guide through the evolving energy landscape
Your strategic decisions in these transformative times need to be well-informed, nuanced, and forward-looking.
Stay informed: Keep abreast of policy developments and market trends post-elections to align your strategies with the evolving energy landscape in South Korea.
Diversify: Consider diversifying investments across nuclear, LNG, and renewable sectors to mitigate risks associated with policy shifts.
Sustainability focus: Align with global trends by incorporating sustainability into your core business strategy, leveraging advancements in clean energy technologies.
Shaping the future together
As we navigate these changes, our commitment to providing you with insightful, actionable intelligence remains unwavering. We invite you to share your thoughts, questions, and areas of interest as we collectively shape a sustainable, prosperous energy future for South Korea and beyond.
ER-Marine’s recommendation:
Follow up on our next Newsletter where we will discuss the draft 11th Basic Plan and the impact on the South Korean energy direction.
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