Korea and Taiwan have been at the forefront of greening their economies. The two countries fiercely compete for global dominance (and with each other) in the manufacture and technological innovation of clean technologies such as solar, wind, smart grids, energy storage, smart buildings and electric vehicles. However, to date their efforts have been held back by a reluctance to fully commit to significantly increasing renewable energy generation.
Their on-going commitment to maintaining imports of fossil-fuel is understandable considering the importance of readily available, reliable and affordable electricity to their national security during their industrial take-offs (from the 1960s onwards). It is now glaringly obvious that this once source of national strength is increasingly a competitive hindrance as countries around the world seek to lead the green industries of the future.
New political leaders in Taiwan and Korea are now setting new national agendas to make up for lost time in renewable energy generation. Tsai Ing-wen of the Democratic Progressive Party (DPP) and Taiwan's first female president(elected in January 2016) committed Taiwan to end nuclear power usage by 2025. President Moon Jae-in boldly announced his vision of ending the operation of all nuclear facilities in Korea by 2030. Tsai and Moon are convinced that to downsize the market for fossil-fuels and nuclear power will open the way to drive new investments in renewable power generation, placing their countries on a new competitive footing.
While it is still early days and a new national energy plan will need to be formulated, Moon's speech at a ceremony to close down the aging Kori-1 nuclear reactor (the nation's first, located in Busan) lays out a new national energy agenda. He discussed the changes as moving through four steps.
The first is to cease operation of all nuclear reactors in the country between 2020 and 2030. Korea currently relies on 25 reactors, which generate approximately 22 percent of electricity (in 2015). [Some conflicting reports state that there will be a reduction, rather than an end, with nuclear falling from 30% to 18% by 2030]
The second noteworthy point about his speech was the closing down of 10 old coal-fired plants by the end of his term in 2022, which will reduce the country's reliance on coal (28 percent in 2015).
Third, Moon indicated the need to raise the proportion of LNG (33 percent in 2015), as a bridging fuel, as a means to make-up for the decrease in nuclear energy and coal in the interim with renewable energy sources. Lastly and most importantly, the new president committed to significantly increasing the portion of renewable energy in the national energy mix from the current level of 5 percent to reach 20 percent by 2030. This latter target would set a new direction for future energy investments.
In similar terms, in October 2016, President Tsai committed to the phasing out of Taiwan's three nuclear reactors in operation as part of a new green energy policy. In 2015, the country's reliance on nuclear energy accounted for 14 percent of energy production (coal providing approximately 38 percent, LNG 31 percent, and renewable energy 4.5 percent). As nuclear is to be phased out, there will be an increase in renewable energy to 20 percent, which would involve 20 GW of generation from solar and 3 GW of off-shore wind power all by 2025 –easily surpassing the 5.1 GW generated by nuclear reactors in 2015.
The potential for phasing out nuclear (and possibly other fossil-fuel energies such as coal and LNG) will have dramatic effects across Asia especially for major coal-producing countries such as Australia. However, how realistic are these new presidential agendas?
Critics of President Moon's recent speech are already out in force. One report argues that Moon's targets are simply unrealistic for a country such as Korea, which relies for 97 percent of its energy from fossil-fuel imports. Nuclear energy accounts for a mere 2 percent of Korea's energy imports, yet produces 30 percent of the country's energy needs. Shutting down nuclear reactors is therefore an unthinkable idea. Phasing out the use of coal would require a drastic increase in the use of LNG (as occurs in many European countries when renewable power is in short supply), which is already a 100 percent imported source.
The most significant weakness of such criticisms is that they do not recognize or choose to ignore the reality that wind and solar power generation technologies are more than sufficient to meet Korea's (and arguably by extension, Taiwan's) industrial-scale energy demands. The fact is that industrial behemoths such as China are moving firmly in the direction of renewable power, to enhance their energy security and to take advantage of rapidly falling costs.
This view is echoed by Francesco Starace, Chief Executive of Enel– Europe's largest power generation company by market capitalization – who last month stated that renewables are becoming the "cheapest and most convenient way of producing electricity…it is a matter of fact…there is no discussion anymore". Of course, one of the biggest criticisms of renewable energies is the problem of intermittency. On this point, Starace argues "In the next two to three years battery storage prices will go down and battery performance will go up so these will come more and more into the picture…We will see batteries much more frequently than people think today".
These views strongly suggest that Korea will be able to focus not just on renewable energy farms but also on energy storage technologies to complement renewable power installation. This would solve the problem of intermittency.
Can these political leaders drive a green revolution within a single five-year presidential term (as exists in Korea) or an extended two four-year presidential term (as in Taiwan)? This would be entirely possible if these two countries were to benefit from importing renewable power from the deserts of Mongolia as is currently being discussed as part of building a Global Energy Interconnection or Asian Super Grid. Together with earlier announcements in late 2016 over steps to liberalize the national monopolies held by the Korea Electric Power Corporation (KEPCO) and Taiwan Power (Taipower), allowing meaningful competition in the power generation market, President Moon and President Tsai's visionary goals appear eminently achievable. Indeed, is there a realistic alternative?
John A. Mathews is Professor in the Macquarie Graduate School of Management; Sung-Young Kim is Lecturer in the Department of Modern History, Politics & International Relations also at Macquarie University, Australia. Write to sungyoung.kim@mq.edu.au.
