By Lee Chang-ho, Director of Electricity Industry Policy Research Center in Korea Electrotechnology Research Institute/doctor of economics
There were years when Korea had to build power plants at any rate to operate manufacturing factories as supply of electric power was too insufficient. Up until about a decade ago, the country constructed standard nuclear power, coal-fired and gas-fired power plants and boasted efficiency in their operation. But people are clamoring shortage of power supply as power consumption unexpectedly soared since several years ago and the electric power authorities failed to prepare for it. They are hastening to expand power plants, but it takes time. To make things worse, operation of one in three nuclear power plants was suspended, causing problems in supply and demand of power.
Terms of ‘electric power shortage’ and ‘power supply-and-demand crisis’ have been repeated for several years. In summer like these days, power authorities are issuing alarm of ‘interest’ or ‘caution’ every other day. It is a pity that many people are working hard day and night to increase power supply capability and reduce its demand. Experts point out multiple causes and suggest a variety of analyses on such serious situation of power supply and demand, but most of them seem to remain at discussion stage rather than suggesting fundamental alternatives. Even though some expert presents an ideal alternative, it may be regarded as a relaxed idea under the current urgent situation. The power authorities are concentrating efforts on taking short-term measures to solve imminent problems. But no one can find any extraordinary way of easing the problem, and we have to rely on administrative capability of the government and power companies or appeal to the people to save power.
We can say that the goal of Korea’s electric power industry has been focused on supplying good quality power to industries for the lowest possible prices. To that end, the country needed to construct large scale power generation complexes in sequestered areas along coasts and install power transportation systems connecting to demanding facilities. The system has been dominated by supply-oriented paradigm in which the electric power industry has made effort to meet increasing demand by expanding supply capabilities by constructing super large nuclear power and thermal power generation complexes as well as extra-high voltage transmission networks, which are advantageous in terms of costs and supply. Therefore, the electric power industry placed major focus on how large the capacity of supply facilities should be, what should be proportion of power sources, and where and in what scale the industry should build and expand transmission networks. In other words, the electric power industry has been confined in supplier-oriented, large scale power source development-oriented, and efficiency-oriented framework. Perhaps power companies may want to maintain the familiar expansion-oriented policy.
The ecosystem of power industry is facing significant challenges. They are environmental issue of fossil fuels, safety issue of nuclear power, and issue of saturated transmission lines. In order to get over these issues and achieve sustainable energy supply, the industry and experts are suggesting a variety of solutions and technologies, such as energy-saving, demand management, renewable energies, distributed resources, and smart grid. Sudden increase of power demand is a problem, but uniformed supply of power is also a problem. Because of such supply-oriented mindset, the percentage of power generated by self-generation facilities in Korea is very small. This situation is partly attributed to odd electric charge and wholesale price system in which companies can sell their electric power for high prices while buying necessary power for low prices. Thus, some discrepant system and judgment yardstick are moving the present electric power industry.
The electric power system in the past might have been proper for securing power effectively and economically in the course of industrialization, but the system is not proper for diversified and decentralized social structure like today. Now is the time to seriously consider whether the current structure can be continued for 30 years or 50 years to come. It is not confined to a part of advanced countries but a global trend that supply structure of energy, especially electric power, has been switching from fossil fuel or nuclear power-oriented structure to that of renewable energies and distributed resources since the turn of the 2000s. Since the early 2000s, Korea has also been pushing forward distribution of renewable energy-based power generation by adopting feed-in tariff (FIT) and renewable portfolio standard (RPS) system. These changes in structure and method of supplying electric power came from basic changes in energy ecosystem related to electric power.
In electric power industry, it is predicted that the prosumer era will come based on distributed system. The power supply and demand system has been maintaining the ‘supplier-oriented’ structure where producers, or power companies constructed large scale power plants and transmission networks and supplied to consumers. But in the new energy ecosystem that is involved with environmental issues, technological advancement and economic efficiency, the power industry can no longer rely on supply-oriented systems, such as large scale generation and massive transmission. Supply costs selected power sources and decided supply methods in the past, but that yardstick is not suitable for the present environment. And now, technological and economic base for supplying necessary energies by demanders is rapidly improving. New technologies are being developed and hurdles are gradually being removed.
Now, the electric power structure in Korea should be evolved into the direction of changing from large scale centralized system to distributed system, from nuclear power and fossil fuel-based power sources to eco-friendly power sources, and from supply resources to demand resources. The power industry will be able to realize these tasks by deciding a milestone and quantitative goal like the RPS, instead of simply chanting slogans or conducting abstract discussions.
Now is the time to seek solutions for entangled power supply and demand issues through new approach and framework. It is evidently an urgent issue to ‘extinguish the imminent fire’, but power authorities need to establish the future-oriented energy system with long-range perspective.
Source : e2news