Power sector in 2030
Coal (43%), gas (25%), and nuclear (25%) comprise the largest shares of South Korea’s power sector. To be on a 1.5°C compatible pathway, South Korea would need to phase out coal by around 2030, gas between 2039-2047, and increase the share of renewables in power generation. The latter’s share in the power mix could reach between 27% to 44% by 2030.
Similar studies based on comparable Paris Agreement compatible pathways show a penetration of renewables up to 48% by 2030 and coal phased out by 2029.29,46 Higher shares could avoid reliance on nuclear energy, LNG, and/or carbon capture and storage, technologies which have decreasing social acceptance, risks of carbon lock-in, and are unproven and costly compared with renewables.44
The government acknowledges that, due to steadily decreasing investment costs for wind and solar, a renewable based power system will be an economically viable option by 2030. However, they see the intermittency and volatility issues associated with wind and solar electricity generation as a significant roadblock.5 The recently released 9th Basic Plan for Power Supply and Demand has coal, LNG, and renewables making up 15%, 31%, and 40% of the planned 193 GW of installed capacity in 2034.71 LNG capacity will increase from 2019 levels of 40 GW to 59 GW by 2034 (although its share of the total will decrease) and 29 GW of coal capacity would still be online in that year (compared to 37 GW in 2019).13 The plan implies that coal would be phased out 25 years later than what a Paris Agreement compatible pathway would require.18 With regards to LNG, while the government may see this as a bridging fuel, studies have shown that it risks carbon lock-in and stranded assets.5,15,30 Moreover, government planning relies on fossil fuels with carbon capture, utilisation, and storage (CCUS) technologies as a supplementary source of power, in spite of high investments costs and so far unproven technologies.5
With regards to market-based mitigation approaches, South Korea’s ETS covers the power sector.60 Critically, however, the country’s power dispatch mechanism does not currently account for carbon pricing, which significantly impedes the ETS’ ability to reduce emissions in this sector.31,61
Towards a fully decarbonised power sector
To be on a 1.5°C compatible pathway would require the power sector to reach zero CO₂ emissions per kilowatt-hour by around 2040. This would be driven by a phase-out of coal by 2030 and gas between 2039 and 2047 latest. At the same time, renewable energy generation would increase rapidly, reaching up to 44% by 2030 and making up 64-96% of the power mix in 2050.
The transition from coal to renewables will have positive impact on health and employment. A recent analysis has shown that a planned unit level phase-out of coal power plants, resulting in 4.2 GW of capacity retired annually out to 2030, would lead to substantial health benefits over the planned coal schedule proposed by the government.18,62 The unit level coal phase-out could also lead to significant job creation.32,63
1 Republic of Korea. Submission under the Paris Agreement: The Republic of Korea’s Enhanced Update of its First Nationally Determined Contribution. (2021).
2 Climate Action Tracker. South Korea. November 2021 update. Climate Action Tracker (2021).
3 Climate Analytics. Transitioning towards a zero-carbon society: science-based emissions reduction pathways for South Korea under the Paris Agreement. (2020).
4 Ministry of Environment. Carbon Neutrality Act Passed by National Assembly Heralding Economic and Social Transition Towards 2050 Carbon Neutrality. (2021).
5 Republic of Korea. 2050 Carbon Neutral Strategy of the Republic of Korea: Towards a sustainable and green society. (2020).
6 Kwag, B. C., Han, S., Kim, G. T., Kim, B. & Kim, J. Y. Analysis of the effects of strengthening building energy policy on multifamily residential buildings in South Korea. Sustain. 12, (2020).
7 Ministry of Education of the Republic of Korea. MoE Announces Plans for Green-Smart Schools of the Future (2020-07-17). (2020).
8 Climate Transparency. South Korea – Climate Transparency Report 2021. (2021).
9 Greenhouse Gas Inventory and Research Center of Korea. 2019 National Greenhouse Gas Inventory Report. (2019).
10 Gokkon, B. Green groups target South Korea’s bailout of coal power plant builder. Mongabay (2020).
11 Dae-sun, H. Doosan Heavy’s financial decline and its failure to read the global power generation industry. Hankyoreh (2020).
12 Reuters Staff. S.Korea’s Moon vows to end new funding for overseas coal projects. Reuters (2021).
13 MOTIE. The 9th Basic Plan for Power Supply and Demand Strategic Environmental Impact Assessment. (2020).
14 Chung, J.-B. Let democracy rule nuclear energy. Nature. (2018).
15 Ng, C. IEEFA: Accepting gas as sustainable will hurt South Korea’s green finance credentials. IEEFA (2021).
16 Dong-hwan, K. Is nuclear energy eco-friendly? EU Taxonomy to test Korea’s new definition. The Korea Times (2022).
17 Republic of Korea. Submission under the Paris Agreement: The Republic of Korea’s Update of its First Nationally Determined Contribution. (2020).
18 Climate Analytics. Assessing the Health Benefits of a Paris-Aligned Coal Phaseout for South Korea. (2021).
19 Stangarone, T. South Korean efforts to transition to a hydrogen economy. Clean Technol. Environ. Policy. 23, 509–516 (2020).
20 Ministry of Oceans and Fisheries of South Korea. “2030 Greenship-K Promotion Strategy” to Dominate the Global Green Ship Market. What’s News (2021).
21 MOTIE. Third Energy Master Plan. (2019).
22 Solutions for Our Climate (SFOC). Fueling the Climate Crisis: South Korea’s public financing for oil and gas. (2021).
23 ICAP. Korea Emissions Trading Scheme. (2021).
24 Byung-wook, K. World’s first ‘hydrogen law’ takes effect. What’s in it? The Korea Herald. (2021).
25 Shin, H. South Korea unveils $43 billion plan for world’s largest offshore wind farm. Reuters. (2021).
26 Atchison, J. The Korean New Deal and ammonia energy. Ammonia Energy Association. (2021).
27 Min-hee, J. South Korean Companies to Collaborate in Green Ammonia Market. Business Korea. (2021).
28 Climate Analytics. Transitioning towards a coal-free society: science based coal-phase out pathway for South Korea under the Paris Agreement. (2020).
29 Kim, Y. G. & Lim, J. S. Treatment of indirect emissions from the power sector in Korean emissions trading system. Environ. Econ. Policy Stud. (2020) doi:10.1007/s10018-020-00282-7.
30 Climate Analytics & Solutions for Our Climate. Employment opportunities from a coal-to-renewables transition in South Korea. (2021).
31 Amoruso, F. M., Sonn, M. H., Chu, S. & Schuetze, T. Sustainable building legislation and incentives in korea: A case-study-based comparison of building new and renovation. Sustain. 13 (2021).
33 Lee, J. H. & Woo, J. Green New Deal Policy of South Sorea: Policy Innovation for a Sustainability Transition. Sustain. 12, 1–17 (2020).
34 Moon, J. Remarks by H.E. President Moon Jae-in of the Republic of Korea at the Leaders Summit on Climate. The Republic of Korea. (2021).
35 SK E&S. SK E&S Aims to Achieve “Corporate Value of 35 Trillion Won By 2025” by Becoming the World’s Leading Hydrogen Provider (2021).=
36 Asia Development Bank. The Korea Emissions Trading Scheme: Challenges and Emerging Opportunities. (2018).
37 Lee, E. & Horslen, J. Next phase of S Korean ETS boosts fuel-switch potential. Argus Media. (2020).
38 Republic of Korea. Vehicle Registration Status. e-Country Indicators. (2021).
39 The 2021 NDC is an update of the country’s first NDC submitted in 2016. An earlier update in 2020 set an absolute target of 24.4% emissions reduction from 2017 levels by 2030. However, this did not translate to a greater emissions reduction ambition over the 2016 NDC’s relative target.
40 Note that in their enhanced updated NDC the South Korean government has estimated CO₂ equivalency using the global warming potentials (GWP) of the IPCC’s Second Assessment Report (SAR). Here we have converted the 2018 emissions level using GWP from the Fourth Assessment Report (AR4). See the Climate Action Tracker assessment (November 2021 update) for further details.
41 See Climate Action Tracker assessment (November 2021 update) for underlying assumptions and assessment of current policies.
42 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.
43 Note that the current value given here refers to 2019 levels. Similarly, the current coal, gas, and power intensity values also refer to 2019 levels. Renewables includes both variable and conventional sources.
44 Costs of carbon capture and storage (CCS) in the power sector have remained stagnant over the last decade. CCS technologies in the power sector also have a non-trivial sustainability footprint in terms of increased water use, higher resource demands, a mining and production footprint, and in general do not address local air pollution concerns. The relative cost trend between CCS in the power sector and renewables means that CCS in the power sector is increasingly unlikely to be able to ever compete with renewable energy.
45 Phase out is defined as occurring when one of the following conditions is met: relative generation of gas/coal drops below 1% of total generation or generation reaches a level equivalent to capacities ranging from 250-500MW and capacity factor of 20-80%. See methodology here.
46 According to a joint analysis between Climate Analytics and Solution for Our Climate (SFOC), South Korea must phase out coal by 2029. Note that the study based its analysis on the global model IEA Energy Technologies Perspectives Beyond 2 degrees Scenario (IEA ETP B2DS 2017) not assessed in this analysis. A recent analysis from SFOC, Chungnam National University, and the Carbon Tracker Initiative indicates a coal phase out by 2028.
47 Korea’s energy intensity of economy (TJ/million USD2015) sits close to the 75th percentile of G20 nations.8
48 Population and GDP statistics from United Nations and World Bank databases respectively.
49 Note that these fossil fuel power generators do not utilise carbon capture and storage technology.
50 The government is also likely motivated by concerns over fine particulate matter emissions, a reason given by the Ministry of Environment for shutting down old coal-fired power plants early.18
51 Note that South Korea excludes LULUCF in their base year emissions level (which are calculated using SAR GWP) but includes contribution from LULUCF sinks in their 2030 target. In addition, in September of 2021, the government enacted the “Framework Act on Carbon Neutrality and Green Growth,” or Carbon Neutrality Act, which stipulates a minimum emissions reduction level of 35% from 2018 levels by 2030 and “specifies procedures of implementing 2050 carbon neutrality vision”.4
52 South Korea’s previous NDC update stated that KRW 73.4 trillion would be invested by 2025 in three key pillars: KRW 30.1 trillion allocated for transition of green infrastructures, KRW 35.8 trillion for low-carbon and decentralised energy supply, and KRW 7.6 trillion for innovation in green industry.33 In July 2021 the Green New Deal was realigned to include a third pillar: laying a foundation for carbon neutrality.1
53 Based on unit level retirements given in 9th Basic Plan for Power Supply and Demand. President Moon stopped issuing permits for new domestic coal-fired power plants at the beginning of his administration.34
54 South Korea currently produces hydrogen from petrochemical by-products and would likely need to utilise LNG for hydrogen production as demand grows. In the long term, the government is considering the use of green hydrogen. Of the 15 GW of hydrogen to be produced by 2040, the government plans that 8 GW will be used domestically and 7 GW will be exported.19
55 See Climate Action Tracker assessment for underlying assumptions.
56 The price of carbon under the K-ETS steadily increased from its initial 2015 value up until the beginning of 2020. The last two years have been marked by greater volatility and a general decline in price. However, the market has begun to recover in the last six months. As a comparison, the EU-ETS carbon price has seen a massive increase over the past two years. Please see here for allowance price data.
57 SK Group’s hydrogen plans include an initial phase of grey hydrogen production followed by a second phase where facilities are fitted CCUS technology to produce blue hydrogen. In the long term, the company aims to produce green hydrogen from renewable electricity.35
58 Currently, the UK’s Hornsea 2 is the world’s largest offshore wind farm with a capacity of around 1.4 GW.
59 See Climate Action Tracker for historical LULUCF emissions.
60 The power sector received the largest allocation of allowances in the schemes initial year of operation, 2015.36
61 Accounting for carbon price in the dispatch order, known as environmental dispatch, has been listed in the 9th Basic Plan for Power Supply and Demand as a potential management plan to limit the amount of power generated by coal generators.13,37
62 The 1.5°C compatible coal plant decommissioning schedules presented in the study could halve the number of premature deaths linked to air pollution from South Korean coal plants within the next 5 years and save over 18,000 lives (over 12,000 lives within South Korea) until the end of their operation, when compared to the current policy plan of phasing out coal in 2054.18
63 The study shows that following the 1.5°C compatible coal plant decommissioning schedules could create more than 62,000 more jobs per year on average from 2020 to 2025, and more than 92,000 jobs per year from 2025 to 2030, when compared to current policy plans.30
64 While aggregate energy demand has fallen, the energy intensity of certain end uses has increased. So while the energy intensity of space heating (per floor area) has decreased by 36%, and that of cooking (per dwelling) has decreased by around 39%, between 2000 and 2018, the energy intensities of water heating and residential appliances (per dwelling) have increased by 19% and 25% respectively over that period. Note that space heating is the largest energy user in the residential sector (accounting for 42% of total consumption).32
65 Specifically, the share of building energy demand met by electricity, hydrogen, and heating networks has grown from 14% in 1990 to 54% in 2019 while that of fossil and synthetic fuels has decreased from 84% to 45% over the same period. Consequently, the emissions intensity of buildings has declined from 70.5 to 27.4 gCO₂/MJ over that period.
66 Direct CO₂ emissions of building energy demand was 48 MtCO₂ in 2019. Under the 1.5°C compatible scenarios, direct CO₂ emissions from buildings reaches a level of 1-19 MtCO₂ by 2050.
67 Individual business consuming over 80 TJ/yr (15 ktCO₂e/yr) are also required to set legally binding energy reduction targets.
68 Direct CO₂ emissions of energy demands in the transport sector was about 106 MtCO₂ in 2019. The 1.5°C pathways have this declining to between 58-67 MtCO₂ in 2030 and further declining to between 2-18 MtCO₂ in 2050.
69 The pathway which assumes high energy demand is an exception. Nevertheless, the median of the pathways shows a decline of 27%.
70 To put this in context, Korea had a total of 24.4 million vehicles registered in 2020, so that the projected electric and hydrogen vehicles to be sold over the stated period would make up 15.8% of the current total.38
South Koreaʼs power mix
terawatt-hour per year
- Negative emissions technologies via BECCS
- Unabated fossil
- Nuclear and/or fossil with CCS
- Renewables incl. biomass
South Koreaʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- SSP1 High CDR reliance
- SSP1 Low CDR reliance
- High energy demand - Low CDR reliance
- Low energy demand
- 100%RE
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for South Korea
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 490 | 160 to 180 | 0 to 40 | −110 to 0 | 2040 to 2045 |
Relative to reference year in % | −68 to −63% | −100 to −93% | −122 to −100% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 43 | 1 to 7 | 0 to 2 | 0 | 2030 |
Share of unabated gas Percent | 25 | 11 to 13 | 0 to 3 | 0 | 2039 to 2047 |
Share of renewable energy Percent | 5 | 27 to 44 | 58 to 73 | 64 to 96 | |
Share of unabated fossil fuel Percent | 70 | 26 to 27 | 0 to 6 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
South Koreaʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in South Korea to be on the order of USD 2 to 78 billion by 2030 and 4 to 103 billion by 2040 depending on the scenario considered. . The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and rapidly growing energy demand. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.