key results of the south korea energy [r]evolution scenario
6.1 development of energy demand to 2050
The future development pathways for South Korea’s energy demand are shown in Figure 6.1 for the Reference and both Energy [R]evolution scenarios. Under the Reference scenario, total primary energy demand in South Korea increases by 58% from the current 9,614 PJ/a to 15,151 PJ/a in 2050. In the Energy [R]evolution scenario, by contrast, energy demand decreases by 28% and 32% in the Advanced case, compared to current consumption and it is expected by 2050 to reach 6,917 PJ/a and 6,513 PJ/a in the Advanced scenario.
Under the Energy [R]evolution scenario, electricity demand in the industrial, residential and services sectors is expected to fall slightly below the current level (see Figure 6.2). The growing use of electric vehicles however, leads to an increased demand reaching a level of 477 TWh/a 2050. Electricity demand in the Energy [R]evolution scenario is still 396 TWh/a lower than in the Reference scenario.
The Advanced Energy [R]evolution scenario introduces electric vehicles earlier while more journeys - for both freight and persons - will be shifted towards electric trains and public transport. Fossil fuels for industrial process heat generation are also phased out more quickly and replaced by electric geothermal heat pumps and hydrogen. This means that electricity demand in the Advanced Energy [R]evolution is higher and reaches 486 TWh/a in 2050, still 37% below the Reference case.
Efficiency gains in the heat supply sector are larger than in the electricity sector. Under both Energy [R]evolution scenarios, final demand for heat supply can even be reduced significantly (see Figure 6.3). Compared to the Reference scenario, consumption equivalent to 1,370 PJ/a is avoided through efficiency measures by 2050.
In the transport sector, it is assumed under the Energy [R]evolution scenario that energy demand will decrease by 20% to 1,021 PJ/a by 2050, saving 45% compared to the Reference scenario. The Advanced version factors in a faster decrease of the final energy demand for transport. This can be achieved through a mix of increased public transport, reduced annual person kilometres and wider use of more efficient engines and electric drives. While electricity demand increases, the overall final energy use falls to 741 PJ/a, 40% lower than in the Reference case.
6.2 electricity generation
A dynamically growing renewable energy market will compensate for the phasing out of nuclear energy and reduce the number of fossil fuel-fired power plants required for grid stabilisation. By 2050, 77% of the electricity produced in South Korea will come from renewable energy sources. ‘New’ renewables – mainly wind, solar thermal energy and PV – will contribute 56% of electricity generation. The installed capacity of renewable energy technologies will grow from the current 3 GW to 164 GW in 2050, increasing renewable capacity by a factor of 55.
The Advanced Energy [R]evolution scenario projects a faster market development with higher annual growth rates achieving a renewable electricity share of 49% by 2030 and 90% by 2050. The installed capacity of renewables will reach 129 GW in 2030 and 198 GW by 2050, 21% higher than in the basic version.
To achieve an economically attractive growth in renewable energy sources a balanced and timely mobilisation of all technologies is of great importance. Figure 6.4 shows the comparative of the different renewable technologies over time. Up to 2020 hydro and wind will remain the main contributors of the growing market share. After 2020, the continuing growth of wind will be complemented by electricity from biomass, photovoltaics and solar thermal (CSP) energy. The Advanced Energy [R]evolution scenario will lead to a higher share of fluctuating power generation source (photovoltaic, wind and ocean) of 41% by 2030, therefore the expansion of smart grids, demand side management (DSM) and storage capacity from the increased share of electric vehicles will be used for a better grid integration and power generation management.
None of these numbers - even in the Advanced Energy [R]evolution scenario - utilise the maximum known technical potential of all the renewable resources. While the deployment rate compared to the estimated technical potential for wind power (KFEM estimation) is relatively high at 72% in the Advanced version, for geothermal less than 1%, for PV less than 2% and for hydro less than 3% has been used.
6.3 future costs of electricity generation
Figure 6.5 shows that the introduction of renewable technologies under the Energy [R]evolution scenario slightly increases the costs of electricity generation in the South Korea compared to the Reference scenario. This difference will be less than 1 cent/kWh up to 2020, however. Because of the lower CO2 intensity of electricity generation, electricity generation costs will become economically favourable under the Energy [R]evolution scenarios and by 2050 costs will be 2 respective 4.2 cents/kWh below those in the Reference scenario.
Under the Reference scenario, by contrast, unchecked growth in demand, an increase in fossil fuel prices and the cost of CO2 emissions result in total electricity supply costs rising from today’s US$ 34 billion per year to more than US$ 117 billion in 2050. Figure 6.5 shows that the Energy [R]evolution scenario not only complies with South Korea’s CO2 reduction targets but also helps to stabilise energy costs. Increasing energy efficiency and shifting energy supply to renewables lead to long term costs for electricity supply that are one third lower than in the Reference scenario.
The Advanced Energy [R]evolution scenario will lead to a higher proportion of variable power generation sources (PV, wind and ocean power), reaching 41% by 2030 and 73% by 2050.
Expansion of smart grids, demand side management and storage capacity through an increased share of electric vehicles will therefore be used to ensure better grid integration and power generation management.
In both Energy [R]evolution scenarios the specific generation costs are almost on the same level until 2030. By 2050, however the Advanced version results in a reduction of 2.2 cents/kWh lower generation costs, mainly because of better economics of scale in renewable power equipment. Due to the faster and earlier expansion of renewable technologies the overall total supply costs in 2030 are US$ 7 billion higher in the Advanced case than in the basic case. However, in 2050 total supply costs are US$ 9 billion lower than in the basic Energy [R]evolution scenario, despite the increased electricity consumption in the transport sector.
6.4 future investment
It would require US$ 457 billion in investment for the Advanced Energy [R]evolution scenario to become reality (including investments for replacement after the economic lifetime of the plants) - approximately US$ 160 billion annual or US$ 4 billion less than in the Reference scenario (US$ 617 billion). Under the Reference version, the levels of investment in nuclear power plants add up to almost 74% while approximately 20% would be invested in renewable energy and cogeneration until 2050. Under the Advanced scenario, however, South Korea would shift almost 90% of the entire investment towards renewables and cogeneration. Until 2030 the fossil fuel share of power sector investment would be focused mainly on combined heat and power plants. The average annual investment in the power sector under the Advanced Energy [R]evolution scenario between today and 2050 would be approximately US$ 11.4 billion.
Because renewable energy has no fuel costs, however, the fuel cost savings in the basic Energy [R]evolution scenario reach a total of US$ 147 billion, or US$ 3.7 billion per year. The Advanced Energy [R]evolution has even higher fuel cost savings of US$ 191 billion, or US$ 4.8 billion per year.
These renewable energy sources would then go on to produce electricity without any further fuel costs beyond 2050, while the costs for coal and gas will continue to be a burden on national economies.