Nuclear generation is primary, but diversification is answer in Korea`s long-term power development program
By Shim Hong Gi, Korea Electric Power Corp.
Even though the anticipated strong demand growth for electricity in Korea provides a source of new opportunities in the future for the power industry, the surrounding business environment seems to be getting more complicated and difficult.
The future of the electric power industry in Korea will be much affected by ever-tightening domestic environmental regulation and the possibility of international regulation of CO2 emissions. Siting problems related to construction of power plants are a very serious issue for Korea. Both new sites and expansions are creating strong public opposition, which is expected to be more serious in the future.
On the other hand, the Korean government is giving first priority to the deregulation and autonomy of the electric power industry to identify with the international move to opening domestic markets and trade initiated by the globalization policy of the government and the World Trade Organization.
Korea Electric Power Corp. (KEPCO) owns and operates 95 percent of the installed capacity in Korea and is the statutory monopoly for the transmission and distribution of power. Seventy-nine percent of KEPCO`s shares are held by the government, and the remaining 21 percent of the stock was sold to the public in 1989, as a first step to the partial privatization of the company. At the close of 1994, KEPCO`s total assets were about (US)$30 billion with a total installed capacity of 28,749 MW and 12 million customers.
As a part of the New Economics Plan, the government adopted a policy to introduce market competition into the electric power sector by allowing private participation. The government intends to annually expand non-utility generation to maximize the economic efficiency and to resolve financing and site acquisition problems.
Although the Korea Electric Power Business Act allows private participation in generation, the government had maintained a negative attitude to non-utility generation except for small hydroelectric power plants and hydroelectric plants in multi-purpose dams. However, the government`s attitude has changed to positive introduction of non-utility generation, with these goals:
– improving economic efficiency in the power industry by introducing competition
– lessening KEPCO`s burden of capital financing and site acquisition, and
– reinforcing international competitiveness of the private companies by upgrading their technical capabilities.
KEPCO has continued its quest to develop nuclear power since the introduction of Korea`s first nuclear unit in 1978. Now KEPCO has 9,616 MW of nuclear capacity with 11 units in operation and another 6,000 MW under construction in six units. Nuclear power development will be continuously maintained as the main power-generation resource in Korea. KEPCO has been working to standardize nuclear plants through the Korea Standard Nuclear Power Plant, based on Electric Power Research Institute and KEPCO experience.
This standard design is being applied to the construction of Ulchin Units 3 and 4 and will be used for Yonggwang Units 5 and 6, Ulchin Units 5 and 6, the North Korean pressurized water reactor (PWR) and subsequent PWRs until the development of the Next Generation Reactor. KEPCO started designing the Next Generation Reactor System in 1992 to further enhance safety and economics of the nuclear power plants. The Next Generation Reactor will be designed by 2000 and will enter commercial operation in 2007.
In Korea, the progress of industrialization and urbanization causes the air and water pollution problems that other developed countries have experienced. Emission standards will gradually become more stringent and will be on the same level of the developed countries. For sulfur oxides, the standard will be strengthened to 150 ppm, for particulates to 40 mg/sm3 and for nitrogen oxides to 200 ppm.
In an effort to diversify energy resources, the power development plan has incorporated a large share of nuclear and liquified natural gas (LNG) power plants. According to the 1993 long-term power development plant, the nuclear share will increase to 37.7 percent of the total installed capacity by 2006, up from 27.5 percent in 1993. LNG, as a substitute for oil-fired plants, will reach 9,522 MW. Approximately (US)$2 billion will be invested in flue gas desulphurization and other emission controls. KEPCO`s efforts should contribute to a significant reduction of air pollutants, with current plans calling for the capacity to double by 2000 while total SOx emission will decrease to one-third its present level.
Electricity consumption in Korea has been rapidly increasing by an annual average rate of 12 percent in the last 15 years. Biggest electricity consumption is in the industrial sector, but the public and service sectors are sharply increasing consumption. It is expected that high growth rates in electricity consumption will be maintained for some years (Table 1–Page 7).
KEPCO`s total installed capacity of 28,749 MW in 1994 showed an addition of 1,938 MW per year since 1991. The share of oil-fired plants decreased from 65.5 percent in 1970 to 19.9 percent in 1994. Nuclear became the largest source, with a 26.5 percent share. LNG, used as a peaking source, increased to 21.3 percent. The fuel mix shows a remarkable improvement in fuel diversity, compared with the heavy reliance on oil that prevailed until the early 1980s.
In the 1993 Long-term Power Develop-ment Program, annual growth rate of peak demand was estimated to be about 6.2 percent through 2001 and 4.3 percent through 2006. The average growth rate during the planning period, 1993 to 2006, is 6.4 percent. Annual peak load was expected to be 28,500 MW in 1996, 37,300 MW in 2001 and 45,530 MW in 2006.
To meet electricity demands, the power-development plan requires an additional 76 power plants of 36,128 MW from 1993 to 2006. The facilities will be 14 nuclear plants, 12,800 MW; 27 coal-fired plants, 13,572 MW; 12 LNG combined-cycle plants, 6,326 MW; four oil-fired plants, 452 MW; and nine pumped storage power plants and hydroelectric plants, 2,980 MW. According to the program, total installed capacity in 2006 will be 54,098 MW (Table 2).
The biannual revision of the Long-term Power Development Program is under way, with demand estimated to grow at 8.6 percent annually from 1995 to 2000. The estimated growth rates are higher than those of the 1993 program, reflecting the higher growth rate of national economics. The amount of additional generating capacity from 1995 to 2010 is expected to be about 46,000 MW, which will include nuclear, coal-fired, LNG combined-cycle and pumped storage hydroelectric power plants.
Editor`s Note: This article is adapted from Mr. Shim`s presentation at POWER-GEN Americas(TM) 1995. Mr. Shim is from the Power Planning Department of KEPCO.