South Korea is undergoing a major change in energy generation policy. The new President is reducing plans for nuclear energy and the construction of two new reactors has been temporarily halted while decisions are made with respect to their ultimate fate. Critics of the rejection of nuclear power in South Korea claim that turning to new fossil fuel plants and renewable energy installations like wind and solar will lead to a sharp increase in the price of electricity.
In response to these criticisms, a member of the Minjoo Party cites a report titled “Examples of Selecting Generation Prices in Major Countries” from the National Assembly Budget Office on July 20. The report includes power generation costs for various sources of power that were provided by the U.S. US Energy Information Administration and the U.K. Department for Business, Energy and Industrial Strategy.
The report states that the projected cost in 2022 for a megawatt of electricity generated by new nuclear power plants (including tax deductions) would be $99.10. The same megawatt from a coal fired power plant equipped with carbon capture technology would be $123.20. A megawatt of solar energy would cost $66.80 and a land-based wind farm would generate a megawatt for $52.20. A combined cycle power plant which integrates a gas turbine and a steam turbine to capture more of the heat produced by the consumption of natural gas than a traditional single cycle power plant would provide a megawatt for $82.40.
The U.K. Department for Business, Energy and Industrial Strategy estimated charges for one megawatt of electricity from various sources for 2025. One megawatt from a nuclear power plant would cost $123.45. One megawatt from a coal power plant would cost $170.23. Large-scale solar farms will generate a megawatt for $81.87. Onshore wind farms will charge per megawatt $79.26. Combined cycle power generation with natural gas would cost $106.56.
In these estimates of the future cost of electricity generation, both the U.S. and the U.K. used the “levelized cost of energy” method for projecting costs. This method is based on dividing the total cost over the lifetime of a power plant by the total amount of electricity generated. The total cost includes design, construction, operation and decommissioning.
The Korean Nuclear Society, the Korean nuclear industry and the opposition parties in the Korean parliament have repeatedly charged that if nuclear power is phased out in Korea, the price of electricity will rise by eighteen percent at the least up to eighty percent at the most. However, the projections from the U.S. and the U.K. show that it is more likely that instead of rising, the cost of electricity in South Korea should fall after nuclear energy and coal are phased out.
The new Minister of Trade, Industry and Energy in South Korea said at his confirmation hearing, “The trends over the past two or three decades show that the unit cost of nuclear power continues to rise when the safety and environmental costs of nuclear power are included, while the technological level of new and renewable energy improves every day. As a consequence, it’s an unshakeable fact that the cost of nuclear power is rising and the cost of new and renewable energy is falling, in terms of the levelized cost of energy.”
With respect to the question of whether the U.S. and U.K. estimates can be applied to power generation in South Korea, a professor at the department of economics and trade at Kyungpook National University in South Korea said, “The unit-cost of nuclear power continues to rise around the world, following the inclusion of social costs, including the cost of decommissioning nuclear reactors. Even if the cost of electricity increases because of a step-by-step nuclear phase-out, it’s estimated to be 6,000 won [about US$5] at the most. As new and renewable energy replaces nuclear power, we could reach a point in the future when domestic energy costs are actually lower than they are now.”
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