I am afraid that your interview article with me on Korea's electricity pricing ("Higher electricity rate needed for reduction of carbon dioxide," Feb. 27) fails to convey my position on the issue more fully. Korea's electricity prices, set by the government, have been kept below the cost of electricity generation since the oil price hike of 2008 during the onset of the global financial crisis, artificially boosting electricity consumption and encouraging wasteful and inefficient uses of electricity, while accelerating increases in greenhouse gas emissions from fossil fuels.
The current electricity pricing system "politicizes" electricity pricing and embeds a bias for permanent under-pricing of electricity, portending continued failure to decouple its consumption and carbon emissions from economic growth, as well as an unsustainable electricity system for Korea, ridden with chronic power shortages and vulnerable to international pressure for a rather abrupt and costly restructuring of the system and of the industry itself, too, at a later stage.
An alternative to this contingency is to reform the pricing system, not just to make electricity more expensive, but more fundamentally to make the pricing decisions independent of the government but essentially leaving it in the hands of the market, letting prices adjust flexibly to match demand with supply by the hour, aided by the smart grid to be nationally deployed while opening the retail market to competition among many small retail service providers.
The transition could take several years of a gradual restructuring of the electricity industry, letting the prices rise gradually, inducing accelerated investment in new and renewable energies as well as energy efficiency. This will be a politically very challenging reform but is an unavoidable one. So, while serving as chairman of the Presidential Committee on Green Growth under President Lee Myung-bak, I urged the launching of this reform, quoting President Reagan's famous statement, "If not now, when? If not us, who?" I am afraid that I am still repeating this quotation, regretting that a decisive entry into the green growth paradigm is being delayed in the meantime.
Young Soo-gil
Former chairman of the Presidential Committee on Green Growth
The current electricity pricing system "politicizes" electricity pricing and embeds a bias for permanent under-pricing of electricity, portending continued failure to decouple its consumption and carbon emissions from economic growth, as well as an unsustainable electricity system for Korea, ridden with chronic power shortages and vulnerable to international pressure for a rather abrupt and costly restructuring of the system and of the industry itself, too, at a later stage.
An alternative to this contingency is to reform the pricing system, not just to make electricity more expensive, but more fundamentally to make the pricing decisions independent of the government but essentially leaving it in the hands of the market, letting prices adjust flexibly to match demand with supply by the hour, aided by the smart grid to be nationally deployed while opening the retail market to competition among many small retail service providers.
The transition could take several years of a gradual restructuring of the electricity industry, letting the prices rise gradually, inducing accelerated investment in new and renewable energies as well as energy efficiency. This will be a politically very challenging reform but is an unavoidable one. So, while serving as chairman of the Presidential Committee on Green Growth under President Lee Myung-bak, I urged the launching of this reform, quoting President Reagan's famous statement, "If not now, when? If not us, who?" I am afraid that I am still repeating this quotation, regretting that a decisive entry into the green growth paradigm is being delayed in the meantime.
Young Soo-gil
Former chairman of the Presidential Committee on Green Growth
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