2023 Korean-French Chamber of Commerce Energy Committee discusses energy prices

Events • Industries

02/07/2023

2023 will be the year that will cause significant changes in the Korean energy sector. The Energy Committee of the French-Korean Chamber of Commerce and Industry was held on January 19, 2023 to shed light on the current global crisis facing the Korean energy market and the direction of electricity and renewable energy policies recently announced by Yoon Seok-yeol. government.

The Energy Committee of the French-Korean Chamber of Commerce and Industry is made up of member companies involved in the energy industry and is held quarterly to share insights and related trends. The committee included Henry Bake, newly established in January 2023, and 15 C-level executives from major foreign companies, including France.

Following the networking session, Guillaume Horn, President of Pramathom Korea and Chairman of the Committee, greeted all attendees before a presentation by S&P Global Director Vince Herr. Director Huh continued his interesting presentation on the theme “Energy Pricing Mechanism and Trends in Korea” with a focus on the renewable energy industry.

Indeed, the surge in energy prices, which has had a significant impact on industry and households, has caught everyone’s attention. The wholesale price of electricity, also known as SMP in Korea, is most affected by the import cost of liquefied natural gas (LNG). The price of LNG fuel, which has been rising significantly since January last year, has recently recorded the highest wholesale electricity price. As a result, KEPCO, the largest power supplier in Korea, continued to face financial difficulties, and in December last year, the Ministry of Trade, Industry and Energy introduced a ceiling on the wholesale price of electricity. In the case of retail electricity prices, upward pressure continued and began to affect prices throughout the industry, and KEPCO had no choice but to raise electricity rates as a means of offsetting losses.

In addition to this, the members who participated in this committee also participated in the Clean Energy Direct Power Transaction (PPA), which was implemented by the Ministry of Trade, Industry and Energy last September, to allow energy suppliers renewable electricity supply directly. generation of power sources for electricity consumers I was also able to deal with trends in the energy market.

These policies were implemented to accelerate the spread of renewable energy, but it appears that Korea needs to accelerate the pace in order to achieve the national greenhouse gas reduction (NDC) target set in the Paris Climate Agreement, which was concluded to reduce carbon emissions. For example, annual wind and solar energy production needs to increase by 2.3 GW and 3.2 GW, respectively, but wind energy needs to increase 20 times faster than now. Under these circumstances, it is expected that nuclear power generation will be the main means of reaching the National Greenhouse Gas Reduction Target (NDC) within current government policy.

At the end of the presentation, a round table was held among the members, followed by discussions on future joint actions by the Energy Commission to strengthen cooperation between the two countries in the energy field.