Interview: S Korea prepares for the hydrogen revolution [NGW Magazine]
How is the Basic Plan for Electricity progressing?
The 9th Basic Plan for Electricity is due to be finalised by the end of this year. As a main working platform, a committee composed of the government, industry, experts and various stakeholders had a kick-off meeting last March. The committee will place priority in laying the ground-work of the future energy transition, which should keep the plan well aligned with senior plans such as Korea's Nationally Determined Contribution under UNFCCC [the Paris agreement on climate change limitation] and the Third Energy Master Plan which was released in June.
Please describe the gas market: its share in the power mix, its share in the national energy mix.
Natural gas has played a crucial role in meeting expanding electricity demand. For instance, its share in the generation fuel mix rose to 27% last year as some of nuclear reactors went off the grid for safety enhancement. In general, its share has stayed around 22% – in third place after coal and nuclear – since 2010.
Natural gas accounted for 15-19% of Korea's total primary energy supply in the same period. Please note that more than half the total natural gas supply is distributed by city gas networks. Since Korea first imported LNG in 1986, natural gas demand has outpaced GDP growth mainly owing to fuel-switching from oil products (except in the transport sector) and coal to electricity and city gas.
The IEA forecasts flat gas demand for Korea for the coming years. Is that your expectation too?
In the short run, I personally do not expect a structural change in natural gas demand. However, it may show steady growth in the long run depending on the role of natural gas in energy transition. The 14th Long-term Natural Gas Plan which would follow the 9th Basic Plan for Electricity at a couple of months interval should have the demand forecast up to 2033.
What sort of future does natural gas have in Korea? Can it be decarbonised or would Korea move towards electrons for preference?
We are going to take advantage of the versatility of natural gas in our energy transition process. First, together with renewable energy sources, natural gas will gradually replace coal and nuclear in our power mix. The Third Energy Master Plan has it that the share of renewables in the power mix will rise to 30-35%, which means natural gas will have to shoulder the bulk of the burden when it comes to dealing with much greater intermittency issue from solar and wind energy. Natural gas will also help us kick-start hydrogen economy as a feedstock for hydrogen, at least for the time being.
Hydrogen is going to play a big role in the energy transition in many countries. Does it have a future in Korea, where there is nowhere to store the carbon dioxide?
The Korean government released Hydrogen Economy Roadmap last January. As a leader in hydrogen vehicles and fuel cells, Korea set a vision of becoming the world's leading hydrogen economy. According to the roadmap, 5.26mn metric tons/yr of hydrogen will be needed by 2040. We plan to import 30% of the total supply carbon-free and will strengthen co-operation with possible carbon-neutral hydrogen exporting countries. In addition, we envisage that much of domestically sourced hydrogen will be produced through water electrolysis by zero-carbon electricity.
Is the government going to liberalise the market further to allow more companies to import LNG and is the government likely to sell any of its stake in Kogas?
Any company which intends to import natural gas for its own use can do so without permission of the government. They are only obliged to notify the government of their intention in advance. As of now, the government does not have any specific plan to make or propose a systematic change in the gas market that might be regarded as liberalisation. Neither does it have a plan to sell its stake in Korea Gas Corporation.
What are Korea's plans for closing the coal plants?
We made it clear in the last Basic Plan for Electricity that the share of coal in the generation fuel mix would go down from 45.4% (2017) to 36.1% (2030). The 9th plan may further lower the target to address serious concerns about particulate emissions and meet the national greenhouse gas reduction goal. However, I cannot tell for now specifically how we are going to phase out coal-fired power plants: the 9th plan will have the detail as its predecessors did.