Fresh push for nuclear power dims LNG expansion in South Korea
The government plans to boost nuclear power generation to 32.4% by 2030.
Plans to further expand nuclear power generation in South Korea pose challenges for the expansion of liquefied natural gas (LNG), Fitch Solutions reported.
Under its 10th Basic Plan for Long-term Electricity Supply and Demand, the government sought to increase the share of nuclear power generation to 32.4% by 2030, and further up to 34.6% by 2036 from 27.4% in 2021.
“This is a complete reversal of former President Moon Jae-in’s policy to shut all reactors when they reach retirement age of 40 years and expand the role of LNG in power sector,” the report noted.
“The decision to favour nuclear appears to be driven by the desire to lower LNG import bill and meet its target of reducing emissions by 40% by 2030 as part of long-term decarbonisation strategy.”
Fitch added that in pursuit of the new plan, South Korea would need to start up suspended reactors, extend the life of existing ones, and build new plants.
“We expect the new policy to generate significant implications on demand for LNG in power sector in the longer term, but we do not expect immediate impact on LNG consumption in the near term due to strong market fundamentals supported by rising LNG imports and sharply declining spot LNG prices.”