South Korean Energy Market Feasibility


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Overview of Power Market and Wind Feasibility

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South Korean Energy Market Feasibility

  1. 1. South Korean Energy Market Feasibility OVERVIEW OF POWER MARKET AND WIND FEASIBILITY By Patrick Brandt, Alex Katzman, and Jared Devine, American Council on Renewable Energy Prepared for Senator Mike Gravel
  2. 2. <ul><li>South Korea’s installed wind energy generating capacity was 58 GW in 2004 (EIA). </li></ul><ul><li>The estimated wind capacity for 2010 is 78.6 GW. The electrical capacity is expected to be 412 TWh. </li></ul><ul><li>In 2009, the total electricity produced was 419.924 GW and the largest growth area was in renewable energy: wind/solar/geothermal grew 53.9 percent. </li></ul><ul><li>South Korea is the 7th-largest net importer of oil in the world and a significant importer of liquefied natural gas (LNG). </li></ul><ul><li>Oil comprises the greatest share of South Korea's total energy consumption. In addition, Coal is the second largest share. </li></ul><ul><li>Nuclear energy has seen substantial annually production in South Korea. Moreover, the shift from fossil fuels to nuclear fuels is widely supported. </li></ul>
  3. 6. <ul><li>South Korea’s wind energy industry is in an early stage, producing 239 GWh of electricity in 2006, while Germany and Spain each produced 30710 GWh and 23040 GWh that year (IEA). </li></ul><ul><li>Project delays, largely due to public objection, as well as the recession, have prevented wind farm construction. (NIMBY Factor) </li></ul><ul><li>13 wind farms (ranging from 0.6MW-98MW) have been installed since 2007. The largest is situated at a site 800m above sea level with an average wind speed of 7.0 meters per second. </li></ul><ul><li>South Korea is competing with established European (Acciona) and Japanese (Eurus Energy) manufacturers to capture its domestic wind turbine market. (Among them are Taewoong Co., PSM Inc., Hyunjin Materials Co., and Dongkuk S&C.) </li></ul>
  4. 10. <ul><li>South Korea has considerable off-shore wind potential in the south-west region and southern islands (Korea Institute of Energy Research): </li></ul><ul><li>Theoretical Potential: 309GW </li></ul><ul><li>Geographical Potential: 62.8GW </li></ul><ul><li>Technical Potential: 31.4GW </li></ul><ul><li>Implementation Potential: 7.9GW </li></ul>
  5. 11. Potential Capacity for On Shore Wind <ul><li>The best on-shore wind potential is concentrated in both the northeast and central regions of South Korea. </li></ul><ul><li>Theoretical Potential: 369GW </li></ul><ul><li>Geographical Potential: 98.7GW </li></ul><ul><li>Technical Potential: 18.5GW </li></ul><ul><li>Implementation Potential: 4.6GW </li></ul>
  6. 12. <ul><li>Hyosung Coporation </li></ul><ul><ul><li>750Kw, gear type </li></ul></ul><ul><ul><li>2MW, gear type: under proof test operation </li></ul></ul><ul><li>Unison Co </li></ul><ul><ul><li>750Kw, gearless type </li></ul></ul><ul><ul><li>2MW, gearless type: under proof test operation </li></ul></ul><ul><li>Hyundai Heavy Industry </li></ul><ul><ul><li>5/3.6MW off-shore type / 2.5MW on-shore type: </li></ul></ul><ul><ul><li>Tech inducement and development </li></ul></ul><ul><li>Doosan Heavy Industry </li></ul><ul><ul><li>3MW off-shore type development </li></ul></ul><ul><li>Samsung Heavy Industry </li></ul><ul><ul><li>2.5MW: Tech inducement and development </li></ul></ul><ul><li>Hanjin </li></ul><ul><ul><li>1.5MW: under proof test operation </li></ul></ul>
  7. 13. <ul><li>Population (2008): 49.2 million </li></ul><ul><li>Unemployment (2008): 3.2% </li></ul><ul><li>Gross income per capita (2007): $24,838 </li></ul><ul><li>Income distribution (1993): 37.7% of income produced by 60% of population </li></ul><ul><li>Value added to economy by construction: 8.9% </li></ul><ul><li>Value added to economy by industry: 30.5% </li></ul><ul><li>75% of manufacturing business have more than 20 employees </li></ul>
  8. 16. Fuel Consumption Overview
  9. 17. C02 Emissions Breakdown
  10. 18. Imports and Exports Note: Virtually no coal or natural gas is exported.
  11. 19. Combined Cycle Production <ul><li>Is a characteristic of a power producing engine or plant that employs more than one </li></ul><ul><li>thermodynamic cycle. </li></ul>
  12. 20. Refining in South Korea <ul><li>According to the Oil & Gas Journal , South Korea had about 2.6 million bbl/d of refining capacity at six facilities as of January 2007. </li></ul><ul><li>The largest is SK Corporation’s 817,000-bbl/d Ulsan plant, which is the second-largest refinery in the world. South Korea also hosts the world’s third-largest refinery, GS Caltex’s 650,000-bbl/d Yosu facility. </li></ul><ul><li>At present, South Korea’s refining capacity exceeds domestic oil demand, and the country exports refined petroleum products to countries in the region. </li></ul><ul><li>While overcapacity has prevented the development of further refineries in South Korea for the last several years, Soil Corporation announced in July 2006 that it is considering building a 480,000-bbl/d plant at Sosan. The proposed S-Oil refinery would target export markets. </li></ul>
  13. 21. <ul><li>Refineries in South Korea, 2006 </li></ul><ul><li>Company Location Capacity (bbl/d) </li></ul><ul><ul><li>SK Corp. Ulsan 817,000 </li></ul></ul><ul><ul><li>GS Caltex Yosu 650,000 </li></ul></ul><ul><ul><li>S-Oil Corp. Onsan 520,000 </li></ul></ul><ul><ul><li>Hyundai Oilbank Corp. Daesan 310,000 </li></ul></ul><ul><ul><li>Hyundai Oilbank Corp. Incheon 270,000 </li></ul></ul><ul><ul><li>Hyundai Oilbank Corp. Busan 9,500 </li></ul></ul><ul><li>Planned Facilities </li></ul><ul><ul><li>S-Oil Corp. Sosan 480,000 </li></ul></ul><ul><li>Source: Oil & Gas Journal; Global Insight </li></ul>Refineries in South Korea
  14. 22. South Korean Generation Forecast US EIA Estimate South Korean Ministry of Knowledge and Economy(’08)
  15. 23. Imports and Exports Note: Virtually no coal or natural gas is exported.
  16. 24. Residential Energy Consumption in South Korea
  17. 25. Commercial Energy Consumption in South Korea
  18. 26. Industrial Energy Consumption in South Korea
  19. 27. South Korean Energy Consumption by Sector
  20. 28. Analysis of Korean Transportation Market <ul><li>Europe and Japan lead the world with the most-stringent passenger vehicle greenhouse gas and fuel economy standards, averaging approximately 41 mpg each in 2006, due to fuel and taxation policies that favor more efficient vehicles </li></ul><ul><li>The U.S. GHG and fuel economy standards still lag behind other industrialized nations </li></ul><ul><li>Fuel economy standards for South Korea are projected to decline over the next five years due to expected sales of vehicles with larger engine size </li></ul>
  21. 29. GHG and Fuel Emissions <ul><li>As of 2006, several European car manufacturers (Peugeot-Citroen, Fiat, Renault, and Volkswagen) were selling vehicles with lower CO2 emissions than most Asian manufacturers </li></ul><ul><li>The increasing popularity of larger, heavier vehicles with large engines has degraded the efficiency of passenger fleets in the U.S. and South Korea </li></ul>
  22. 30. Background on Korean Transportation Market <ul><li>South Korea established mandatory fuel economy standards in 2004 to replace a voluntary system </li></ul><ul><li>Starting in 2006 for domestic vehicles and 2009 for imports, fuel standards are set at 34.4 CAFÉ-normalized mpg for vehicles with engine displacement under 1,500 cubic centimeters (cc) and 26.6 mpg for those over 1,500 cc. </li></ul><ul><li>According to the Director of Center for Environmentally Friendly Vehicles in Korea, Dr. Youngil Jeong, the Korean Ministry of Commerce and the Ministry of Environment are discussing strategies to redesign the fuel economy standards </li></ul><ul><li>Beginning in 2012, Korea will introduce new fuel economy and GHG emission standards for all passenger vehicles manufactured locally (Bernama) </li></ul>
  23. 31. What is Hyundai-Kia Motors doing with electric hybrid technology? <ul><li>In July 2009, Hyundai launched the Elantra LPI HEV, its first hybrid electric vehicle for mass production in Korea. </li></ul><ul><li>With a fuel economy rating of 41.9 mpg, CO2 emissions of 99g/km, the vehicle is powered by a 1.6 LPG (liquefied petroleum gas) engine, a 15kW DC motor, and a CVT (continuously variable transmission). </li></ul><ul><li>The adoption of liquefied petroleum gas, a widespread fuel source in Korea, lowers the fuel cost by 40% when compared to existing hybrid vehicles and 50% lower compared with the gasoline version of the Elantra. </li></ul>
  24. 33. Hyundai Fuel Cell Technology <ul><li>By 2021, Hyundai-Kia Motors plans on commercializing fuel cell electric vehicles (including mid to large-sized SUVs) </li></ul>
  25. 35. Marine LNG Terminals in South Korea
  26. 36. Utilities
  27. 37. <ul><li>Korea Hydro & Nuclear Power Company </li></ul><ul><li>- 20 Nuclear Power Plants Operating </li></ul><ul><li>- 5 Hydro Power Plants Operating </li></ul>
  28. 38. Detailed Analysis of Korean Utility Market <ul><li>The Korean Electricity Generation Sector Comprises of six wholly owned subsidiaries of KEPCO: </li></ul><ul><ul><li>Korea Hydro & Nuclear Power Co., Ltd (KHNP) </li></ul></ul><ul><ul><li>Korea East-West Power Co., Ltd (EWP) </li></ul></ul><ul><ul><li>Korea Midland Power Co., Ltd (KOMIPO) </li></ul></ul><ul><ul><li>Korea South-East Power Co., Ltd (KOSEP) </li></ul></ul><ul><ul><li>Korea Southern Power Co., Ltd (KOSPO) </li></ul></ul><ul><ul><li>Korea Western Power Co., Ltd (KOWEP) </li></ul></ul>
  29. 39. Korea East-West Power Company - 9 Power Plants Operating
  30. 40. <ul><li>Korea East-West Power Company Power Plant Locations </li></ul>
  31. 41. Korea Midland Power Co. - 17 Power Plants Operating
  32. 42. <ul><li>Korea South-East Power Company </li></ul><ul><li>- 7 Power Plants Operating </li></ul><ul><li>Samcheonpo Thermal </li></ul><ul><ul><li>Capacity: 3,240MW – Fuel: Bituminous Coal </li></ul></ul><ul><li>Yeongheung Thermal </li></ul><ul><ul><li>Capacity: 1,600,000kw; 1,740,000kw – Fuel: Bituminous Coal </li></ul></ul><ul><li>Yeongdong Thermal </li></ul><ul><ul><li>Capacity: 325,000kw – Fuel: Coal and Heavy Oil </li></ul></ul><ul><li>Yeosh Thermal </li></ul><ul><ul><li>Capacity: 528,000kw – Fuel: Heavy Oil </li></ul></ul><ul><li>Bungdang Combined Cycle </li></ul><ul><ul><li>Capacity: 900,000kw – Fuel: Natural Gas and Light Oil </li></ul></ul><ul><li>Muju Pumped Storage </li></ul><ul><ul><li>Capacity: 600,000kw – Fuel: Pumped Water Underground Generation </li></ul></ul><ul><li>Yecheon Pumped Storage </li></ul><ul><ul><li>Capacity: 800,000kw – Fuel: Pumped Water Underground Generation </li></ul></ul><ul><li>Korea Southern Power Company </li></ul><ul><li>- 7 Power Plants Operating </li></ul><ul><li>Hadong Thermal </li></ul><ul><ul><li>Capacity: 4,000MW – Fuel: Bituminous Coal </li></ul></ul><ul><li>Shinincheon Combined Cycle </li></ul><ul><ul><li>Capacity: 1,800MW – Fuel: LNG </li></ul></ul><ul><li>Busan Combined Cycle </li></ul><ul><ul><li>Capacity: 1,800MW – Fuel: LNG </li></ul></ul><ul><li>Youngnam Thermal </li></ul><ul><ul><li>Capacity: 400MW – Fuel: Bituminous Coal </li></ul></ul><ul><li>Cheongpyung Pumped Storage </li></ul><ul><ul><li>Capacity: 400MW – Fuel: Hydraulic Power </li></ul></ul><ul><li>Namjeju Thermal </li></ul><ul><ul><li>Capacity: 240MW – Fuel: Bituminous Coal </li></ul></ul><ul><li>Hankyung Wind Farm </li></ul><ul><ul><li>Capacity: 21MW – Fuel: Wind Power </li></ul></ul>
  33. 43. <ul><li>Korea Western Power Company </li></ul><ul><li>- 6 Power Plants Operating </li></ul><ul><li>Taean Thermal </li></ul><ul><ul><li>Capacity: 8,500MW – Fuel: Bituminous Coal </li></ul></ul><ul><li>Pyeongtaek Thermal and Combined Cycle </li></ul><ul><ul><li>Capacity: 4,350MW – Fuel: Bunker C-Oil </li></ul></ul><ul><ul><li>Capacity: 4,80MW GT and 1,160MW MW ST – Fuel: LNG </li></ul></ul><ul><li>Seoinchon Combined Cycle </li></ul><ul><ul><li>Capacity: 8,150MW GT and 875MW ST – Fuel: LNG </li></ul></ul><ul><li>Samryangjin Pumped Storage </li></ul><ul><ul><li>Capacity: 2,300MW – Fuel: Pumped Water Underground Generation </li></ul></ul><ul><li>Cheongsong Pumped Storage </li></ul><ul><ul><li>Capacity: 2,300MW – Fuel: Pumped Water Underground Generation </li></ul></ul>
  34. 45. Electricity Market in South Korea (Korea Power Exchange, 2007)
  35. 46. Consumer (Retail) Price of Electricity (Korea Power Exchange, 2007)
  36. 47. Electric Power Supply & Demand (Korea Power Exchange, 2007)
  37. 48. <ul><li>Cost of installing a 3MW turbine: $7,500,000 </li></ul><ul><li>Jobs created: 30 </li></ul><ul><li>Payback: </li></ul>
  38. 49. Electricity Market Comparison
  39. 50. Installed Capacity
  40. 51. Nuclear Plant Employment <ul><li>1400 - 1800 jobs during construction (with peak employment nearing 2400) </li></ul><ul><li>Approx. 700 permanent jobs during plant operation: they pay 36% more than average salaries in local community </li></ul><ul><li>The 700 permanent jobs would create an equivalent number of service jobs within the community (i.e. car dealers, dry cleaners, food service,etc.) </li></ul>
  41. 52. New Nuclear Plant Construction <ul><li>Total cost approx. $6-8 billion (depending on size), including interest during construction </li></ul><ul><li>Vast construction requirements for commodities like concrete and steel and component manufacturing: </li></ul><ul><ul><li>400,000 cubic yards of concrete – five time as much concrete as in the foundation and floor slabs of the Sears Tower in Chicago </li></ul></ul><ul><ul><li>66,000 tons of steel </li></ul></ul><ul><ul><li>44 miles of piping and 300 miles of electric wiring </li></ul></ul><ul><ul><li>130,000 electrical components </li></ul></ul>
  42. 53. Estimated Jobs Created <ul><li>NEI estimates that private investment in new nuclear power plants in 2008 has created approx. 14,000-15,000 jobs in USA </li></ul><ul><ul><li>Pre-Construction (skilled and unskilled labor) </li></ul></ul><ul><ul><li>Construction (machinists, assemblers, welders, electricians) </li></ul></ul><ul><ul><li>Operation (engineers, technicians, and operators) </li></ul></ul>