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Will Korea's energy transition go beyond the power sector?

The focus of Korea’s energy transition must go beyond the power sector to target emissions from industry and transport, the IEA policy review says. The industrial sector is emissions-intensive and accounts for over half of Korea’s final energy consumption despite the notable improvement in energy efficiency over the last decade.

How does Korea's electricity sector work?

Korea’s electricity sector is operated as a mandatory pool with a single buyer; wholesale and retail prices are not set by the market, but by the government. The role of Korea’s Electricity Regulatory Commission is largely advisory, with all important decisions taken by the government.

How can Korea reduce emissions from the power sector?

Korea aims to reduce emissions from the power sector in a cost-effective way, without compromising electricity security. In liberalised power markets, like Korea’s, the wholesale market should be the key enabler to reach policy objectives and to ensure the efficient dispatch of all resources.

Does Korea have a national emissions trading system?

In 2015, Korea became the first country in Northeast Asia to introduce a nationwide emissions trading system that sets a best practice example for other countries to follow. But more needs to be done to reduce the carbon intensity of Korea’s energy supply, which is above the IEA average because of the high share of coal-fired power generation.

Does Korea need a wholesale power market?

In liberalised power markets, like Korea’s, the wholesale market should be the key enabler to reach policy objectives and to ensure the efficient dispatch of all resources. However, Korea’s current cost-based system does not account for factors such as emissions and system security.

How does Korea's energy transition work?

This closely links Korea’s energy transition to efforts to spur investments in energy storage systems, smart grids and intelligent transport systems. “Korea can draw on its technological expertise by addressing regulatory and institutional barriers in its energy markets and by fostering more active consumer engagement,” Dr Birol said.