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Increasingly economical renewables mean now’s no time for South Korea to cling to nuclear power

In these changing times, it is unfortunate that Korea is choosing to cling to the nuclear industry, the marketability of which is becoming increasingly unclear. Jul.15,2022
The new administration’s nuclear power advocacy runs counter to global trends toward renewables.

A new report released by the International Renewable Energy Agency (IRENA) has revealed that global solar and wind power generation costs are down 13%-15% compared to one year ago.

According to IRENA’s “Renewable Power Generation Costs in 2021” report released on Wednesday, the global weighted average levelized cost of electricity (LCOE) of new onshore wind projects added in 2021 fell by 15% year on year while that of new utility-scale solar PV and offshore wind both declined by 13%.

The report explains that the LCOE of a given technology is the ratio of lifetime costs to lifetime electricity generation; it is used as a measure to compare the economic feasibility of the various methods of generating electricity.

In 2021, renewables’ share of total power generation capacity growth reached 81%. It seems that these figures continue to improve as the economy gets stronger.

In Korea, however, the perception that nuclear power equals cheap energy is still strong. This is despite the fact that globally, renewable energy dominates nuclear power in terms of economic feasibility.

According to a report released by Lazard, a global asset management company, in October of last year, the average cost of electricity per megawatt-hour (MWh) of solar power fell by 90%, from $359 in 2009 to $36 last year. Wind power also fell 72% from $135 to $38.

Comparatively, nuclear power saw a 36% increase in cost from $123 to $167 during the same period. In fact, nuclear power has already become 4.5 times more expensive than renewable energy.

This is because, while technology is developing day by day as investment into renewable energy increases in step with the global trend of transitioning to cleaner energy sources, construction costs for nuclear power plants are increasing as safety regulations are strengthened after the Fukushima incident.

Advanced economies, particularly those in Europe, are scrambling to come up with energy policies centered on renewable energy. To this end, the EU announced in May that it would increase the share of renewable energy from the current 22% to 45% by 2030. This is an upward revision of the 40% target set a year ago.

The change is reportedly aimed at quickly getting rid of Europe’s dependency on Russian energy. In other words, Europe seems to be choosing to expand its use of renewable energy as a solution to its current energy crisis.

South Korea, however, is running counter to this trend by advocating to become a leader in the nuclear power field. By 2030, the proportion of Korea’s energy mix derived from nuclear power will increase to more than 30% while the proportion of renewable energy will reportedly be adjusted to a “reasonable” level.

The plan is to lower the existing renewable energy target, which stands at 30.2% by 2030, because it is perceived as being too high.

In the near future, whether or not companies use renewable energy is likely to act as a new trade barrier. In these changing times, it is unfortunate that Korea is choosing to cling to the nuclear industry, the marketability of which is becoming increasingly unclear.

July 13, 2022 - Posted by | business and costs, politics, South Korea

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