2016: Korea's Greening Strategy

Klimawandel und Ökologie
The Asia-Pacific Journal | Japan Focus   Volume 14 | Issue 24 | Number 6 | Dec 2016
Mit freundlicher Erlaubnis von Japan Focus

Korea’s Greening Strategy:  The role of smart microgrids

Sung-Young Kim, John A. Mathews

"There are many ways that an economy can be greened. Building vast new renewable energy manufacturing industries is one pathway – as pioneered by China. Deploying extensive renewable power generation systems is another pathway – as demonstrated by Germany with its Energiewende. Yet another route is pursuing R&D led strategies and strategic initiatives via the military, as shown by the US. Now Korea demonstrates another pathway, one based on liberalization of its power generation system (to promote competition) and development of the IT-enabling of its electric power grid (smart grid) with a characteristic modular approach to smart grid construction, utilizing microgrids.

One of Korea’s great advantages during the era of fossil fuels dominance has been a tightly regulated electric power industry, based on a state-owned electric power quasi-monopoly Korea Electric Power Corporation (KEPCO) which has provided reliable electric power to Korean industry at artificially low (subsidized) prices. According to a 2013 World Bank report, KEPCO retains 95% market share over power generation and 100% market share over transmission and distribution of the electricity industry.1 This paradigm is under stress as Korea moves slowly to green its economy and power system. Admittedly, Korea’s rate of take-up of renewable power sources is slower than in almost all OECD economies. Yet its advance towards a smart grid is characteristically bold and export-business oriented – in a continuation of the industrial policy traditions that have served Korea well in the past.

We have been following the evolution of Korea’s greening, from the original ‘green growth’ strategies developed under the previous president, Lee Myung-bak, to the more recent initiatives taken under the presidency of Park Geun-hye. It is only with the announcement in August 2016 of a drive to open the electricity generation market to competition, that the greening of Korea’s power system has become a serious possibility.

In this article we reflect on these latest developments in Korea’s green growth (now subsumed under ‘creative economy’) strategy, and probe the reasons that have held back the transition to renewable sources of energy. Our argument will focus on the particular niche targeted by Korea, namely the transition to smart grids and in particular modular, self-sufficient microgrids that are suitable for Korea’s own islands and as exports to other countries, which are home to large numbers of islands (Indonesia) or geographically remote communities (Canada).2

Our argument will be that Korea has a pragmatic and business-oriented green strategy (like Taiwan or China) that involves promoting new home-grown microgrid systems, involving a broad range of Korean companies such as LSIS and Samsung SDI as well as the state-owned power utility KEPCO. We demonstrate that issues to do with liberalization and competition in the electric power sector are closely related to a broader shift to green energy systems, in which an interesting contrast is emerging between Taiwan and Korea.3 Both countries are grappling with the legacy of a quasi-monopoly in electric power. Taiwan is now moving rapidly towards a post-nuclear era, while Korea remains committed to continuing with its nuclear strategy. ... "


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