Overseas coal power investment too? Is phasing out nuclear not enough—must we also choke off the power industry?

340 Companies Distressed by Democratic Party Lawmakers’ Proposed Related Bills

They Are Tying Our Hands and Feet to Block Investment in Power Plants in Indonesia and Vietnam

Under the Moon Jae-in administration’s nuclear phase-out policy, South Korea’s domestic nuclear industry has been nearly destroyed. Related firms and parts suppliers are effectively proceeding toward closure, and nuclear engineering departments at universities are struggling to recruit new students. Even the workforce that remained is leaving Korea for jobs abroad. Some say that because nuclear plants are still operating, the nuclear phase-out has not even truly begun. But an industry with no future rots from the roots. Now that the roots have disappeared, the nuclear phase-out has reached its final stage. Yet, ironically enough, the Moon Jae-in administration has not blocked overseas exports of nuclear power plants. We hear that President Moon Jae-in has promoted nuclear power sales to countries such as Kazakhstan. It is still difficult to understand how one can think of selling to other countries the very nuclear power that we ourselves say we will abandon.

This time, Democratic Party lawmakers Seonghwan Kim, Wonsik Woo, Hyeongbae Min, and Soyoung Lee have proposed the “four bills banning overseas coal power investment.” The aim is to prevent Korean companies from participating in coal-fired power generation projects abroad. The coal-fired power plant to be built in Java, Indonesia, has already completed contracts with local companies, and the Vung Ang-2 power plant in Vietnam is scheduled to begin operation in 2025. The 340 related companies are deeply troubled. Construction of domestic coal-fired power plants is already restricted because of carbon emissions. A law that would also prevent participation in coal-fired power plant construction overseas is a form of regulation on business that goes beyond even the nuclear phase-out. Given the ruling party’s 178 seats, these “four bills banning overseas coal power investment,” which reflect the position of environmental groups, are also highly likely to pass easily.

Environmental groups speak of a global trend away from coal and argue that Korean companies must not become so-called “climate villains.” But this is a leap in logic. Whether to use coal-fired power is a decision for the country concerned. No advanced country has yet completely eliminated coal-fired generation. Countries use coal power according to their own circumstances, and judging that situation is the responsibility of the country in question, not something Korean companies can decide. The so-called global trend away from coal is also far from the facts. The countries that emitted greenhouse gases through carbon emissions while developing their economies were the advanced Western nations, not the developing world. Those advanced Western countries, which were the real “climate villains” for a long time, cannot now demand carbon reductions from developing countries that are only now trying to grow their economies. Climate agreements are also based on this principle. Therefore, no country criticizes Vietnam or Indonesia for using coal-fired power.

Some also argue that thermal power plants currently being promoted will lose economic viability because the point at which the generation costs of thermal power and renewable energy sources such as solar become equal—the so-called “grid parity”—will be reached around 2027–28. But this is a highly flawed concept, much like the old “oil will run out in 30 years” theory, and it is unclear whether that forecast will come true even by 2027. On the 25th, Hanwha announced that it was withdrawing from a solar power project in Colorado in the United States, reportedly incurring losses of KRW 20 billion. The Colorado solar project had been a business to sell electricity for 25 years, but Hanwha pulled out after only four years of investment. Let us also recall that in 2016 a certain Korean professor announced that solar power in Korea would reach grid parity within two to three years. First of all, that professor’s 2016 claim about “grid parity” was wrong, and the “grid parity” projected for 2027 is likewise uncertain. Above all, it is clear that Vietnam and Indonesia do not believe environmental groups’ claims about “grid parity.”

The “four bills banning overseas coal power investment” are laws that would kill the entire power generation industry. Whether the fuel is coal, oil, or LNG, the distinction lies only in the type of fuel used. The rest of the process—boiling water to create steam and using that steam to turn turbines to generate electricity—is common to all power plants. Accordingly, overseas coal-fired power plants will still order and use those common processes as they are, and whether the fuel is coal or oil, manpower for those common processes is still needed. In the end, if we cut off coal power plant work with our own hands, South Korea’s entire power generation industry will wither away. One can only hope that the blind high-handedness of the giant ruling party does not once again bring disaster upon businesses.

Youngseop Won, Attorney at Law

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Original title: 해외 석탄발전 투자도? 탈원전도 모자라 발전산업 숨통 끊기

Author: Young-seop Won

Date: 2020-09-02

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=19&idx=23050