South Korea mulls coal-fired power plant closures
June 3, 2016
By Argus Media
June 3, 2016 (Argus) — The South Korean government is due to release a plan to raise government investment in clean energy, in a move that is expected to include the closure and retrofitting of its oldest coal-fired power units.
The office for government policy co-ordination, part of the prime minister’s office, has developed a strategy in consultation with the environment, energy and finance ministries to address increasing air pollution and fine particle emissions that are detrimental to health. The document could be released as early as tomorrow, the government has indicated.
South Korean energy traders said the government has been discussing possible plans to invest $2.7bn to reduce air pollution by taking one of a set of options, subject to regional power requirements, for old coal-fired power plants. The options could include a total shutdown of the coal-fired plants, retrofitting facilities to curb emissions or conversion to use biomass. Other options could include switching to LNG facilities, or increasing sulphur processing at a special environmental facility.
South Korea has 53 coal-fired plants, three of which are more than 40 years old and have a total capacity of over 600MW. South Korean utility Kosep operates one of the three plants, which was built in the early 1970s, and fellow utility EWP operates the other two. At least eight more plants, but possibly more, are older than 30 years, and have more than 3.5GW of combined capacity. They are mostly operated by Kosep and its state-owned parent company Kepco. Several of these are not far from being 40 years old.
If much of this capacity is closed it could have a marked effect on coal markets. Weaker coal imports by China and rising domestic production in India have convinced many producers to target coal consuming countries such as Japan, South Korea and Taiwan, where consumption has been expected to increase or at least remain steady over the years ahead.
South Korea imported 86.15mn t of bituminous coal last year, down by 2pc from 2014, customs data show. Australian and Russian coal suppliers took a larger market share last year, while Indonesian supplies lost some ground.
Ministers are exploring policies to address fine dust pollution, although some market participants said emissions from coal-fired power plants in South Korea are already well monitored and managed. The government provides renewable energy credits for biomass-fired power generation.
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