South Korea’s current fuel mix (as of 2019) is largely fossil fuel based with coal, natural gas, and oil comprising 29%, 18%, and 38% of the total primary energy mix respectively. Nuclear makes up another 14% while renewables, including biomass, comprise 2%. Coal’s share in electricity generation is 43%, followed by 25% for nuclear, 25% for natural gas, 2% for oil, and 5% for renewables, including biomass.
In recognition of the impacts of coal, such as air pollution, the South Korean government has placed a nationwide ban on the construction of new coal-fired power plants. The government’s coal phase-out plans include both an increase in renewable generation and the conversion of some existing coal units to natural gas., Historically, South Korea has also made large financial contributions to international coal development, but recently committed to ending its support for coal plants abroad.– However, the government has somewhat backpedalled on their commitments, granting exemptions for coal plant retrofitting and related projects, even while major Korean financial groups have announced plans for carbon neutral portfolios.
South Korea has also announced plans to move away from nuclear power and increase the amount of renewables in its generation mix. Nuclear energy has played a significant role in its energy mix since the 1970’s, making South Korea a country with the highest density of nuclear power plants in the world. However, following the 2011 Fukushima meltdown in Japan, public opinion turned against nuclear power, with many in the country voting to decrease nuclear’s share in the country’s energy mix.
The government has recently released its K-taxonomy, intended to guide sustainable finance. While nuclear has not been included as a suitable investment, gas and LNG have. Natural gas is not a transition fuel. Any investment in this fossil fuel is highly likely to lead to stranded assets and carbon lock-in.,