© Reuters. Lost 10.8 cents in 5 years due to end of nuclear era… Increase in LNG power generation, electricity purchase cost increases
The Ministry of Trade, Industry and Energy estimates that the cumulative loss caused by the Moon Jae-in government’s nuclear phase-out policy is more than 10 trillion won in electricity purchase costs alone. KEPCO and other companies are said to have paid a higher cost in purchasing electricity by reducing the operation of nuclear power plants with low power generation costs and replacing them with liquefied natural gas (LNG) power generation with expensive fuel prices.
According to the ‘estimate of the cost of purchasing power as a result of the end of the nuclear era’ presented by the Ministry of Trade, Industry and Energy on the 4th by Kwon Myung-ho, the People’s Power lawmaker, the amount of the loss of the cost of purchasing electricity and it happened over five. years from 2017, when the last government’s policy will be phased out in earnest, up to July this year, worth a total of 10.77 trillion won. This is the first time the government has estimated that nuclear power stations will be lost.
If the amount of nuclear power generation was less than 29.7% (the share of nuclear power generation in 2016), the Ministry of Industry and Energy estimated the loss assuming that the difference is replaced by LNG power generation. It is a number multiplied by the difference between the average fuel cost of nuclear power stations and the LNG settlement unit price at the time.
In 2017, the first year of denuclearization, the share of nuclear power generation out of 576,412 GWh (1GWh = 1 million kWh) of total power generation was 26.8%, which was 2.9 percentage points lower than that of nuclear power plants in 2016 .This means that 16,716 GWh, which should have been produced by nuclear power stations, has been replaced by other energy production systems. At this time, the LNG settlement unit price was 111.6 won/kWh, and the nuclear power plant was 5.7 won/kWh, with a difference of 105.9 won per kWh. In the end, the loss calculated by multiplying the difference between the fuel cost of a nuclear power plant and the LNG settlement unit price of 105.9 by 16,716 GWh, which was lower than originally expected, won 1.77 trillion.
According to the same calculation method, losses were estimated at 4.3 trillion won in 2018, 2.51 trillion won in 2019, 370 billion won in 2020, and 1.6 trillion won in 2021. This year, it loses 210 billion won until July.
This year, the share of nuclear power generation was more than 29%, resulting in a loss of only 1040GWh, but the estimated loss of power purchase cost reached 210 billion won. As the LNG settlement price rose to 204.9, the difference from nuclear power plant fuel cost (6.4 gained) became 198.5, leading to a bigger loss. In 2017, the LNG settlement unit price was 111.6 won and the nuclear power plant fuel cost was 5.7, with a difference of 105.9 won. However, from January to July 2022, the fuel cost of nuclear power plants rose 0.7 won to 6.4 won, and the LNG settlement unit price rose 93.3 to 204.9 won during the same period. This means that if an LNG power plant is operated instead of a nuclear power station, there will be a loss of almost 200 won per kWh.
LNG prices are predicted to rise again this winter due to the outcome of the Russian-Ukrainian war. Accordingly, it is noted that the factors that increase the electricity rate need to be reduced by increasing the share of nuclear power plant operation.
Asked about the cause of KEPCO’s shortfall in the National Assembly’s Small and Medium Enterprises Committee of the National Assembly on the same day, Trade, Industry and Energy Minister Lee Chang-yang said, “If the ratio of power sources with power generation costs low, such as nuclear power plants, had been high in the power mix (composition ratio), the high energy prices would have been The effect would have been reduced.”
As KEPCO expects an annual operating loss of up to 40 trillion won this year, starting this month, electricity rates rose 7.4 won per kWh for home use and up to 16.6 won for industrial use.
Representative Kwon Myung-ho said, “We need to immediately get rid of nuclear power plants that have harmed the people and establish the 10th Basic Plan for Electricity Supply and Demand in accordance with the reality of Korea as soon as possible. “
In August, the government unveiled the draft of the 10th basic electricity supply and demand plan, which includes the electricity supply and demand plan for 2022-2036. The draft includes content to increase the share of nuclear power plants to 32.8% of total power generation by 2030. This is 8.9 percentage points higher than that of the Moon Jae-in administration at the end of last year, which set the ratio of nuclear power generation to 23.9% in 2030 in the National Greenhouse Gas Reduction Target (NDC).
Reporter Kim So-hyun alpha@hankyung.com
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