SEOUL: It started with a few bogus safety certificates for cables shutting a handful of South Korean nuclear reactors.
Now, the scandal has snowballed, with 100 people indicted and Seoul under pressure to rethink its reliance on nuclear power.
A shift away from nuclear, which generates a third of South Korea’s electricity, could cost tens of billions of dollars a year by boosting imports of liquefied natural gas, oil or coal.
Although helping calm safety concerns, it would also push the government into a politically sensitive debate over whether state utilities could pass on sharply higher power bills to households and companies.
Gas, which makes up half of South Korea’s energy bill while accounting for only a fifth of its power, would likely be the main substitute for nuclear, as it is considered cleaner than coal and plants can be built more easily near cities.
“If the proportion of nuclear power is cut, other fuel-based power generation has to be raised. If we use LNG, the cost will definitely go up,” said Hwang Woo-hyun, vice president of state-run utility Korea Electric Power Corp (KEPCO).
KEPCO owns Korea Hydro and Nuclear Power Co Ltd (KHNP), which operates the county’s nuclear reactors, and also has a quarter stake in Korea Gas Corp (KOGAS), the world’s largest corporate buyer of LNG.
The extra cost to Asia’s fourth-largest economy of importing more LNG to replace nuclear could be approaching 20 billion dollars per year by 2035, according to Reuters calculations based on government projections for power capacity growth and South Korea’s average LNG prices for last year.
South Korea could need as much as 25 million extra tonnes by 2035 if a proposal to reduce nuclear’s share of its energy mix is drafted into power policy.
The cost projection could be conservative if rising demand from South Korea fuels further price rises in LNG. Top LNG importer Japan is also buying more gas than ever as it compensates for its own nuclear shutdown in the wake of the Fukushima disaster.
Three of South Korea’s 23 reactors are offline due to the fake safety certificates, while another will be shut on October 30 to examine welding quality related to the safety of a steam generator. (Reuters)