IEEE Power & Energy Magazine - November/December 2014 - 77

The economics of these distributed resources is
dependent upon LNG prices and the electric rate structure,
which currently favors electrical usage for heating systems.

nearly double, to 70.2 million toe in 2035 from 39.1 million toe
in 2011. The report assesses the effect of electricity prices on
electrical demand.
The Sixth BPE in South Korea calls for the aggressive
construction of coal-fired power plants, which will reduce
the role of LNG in power generation. The economic and reliability effects of the RCES business model must therefore be
evaluated. The main problems confronting the RCES model
in South Korea are poor economics, exposure to high LNG
prices, and the uncertainties of the electricity market system.
South Korea does not have the capacity to produce natural gas, and the country imports LNG from Qatar, Oman,
and Indonesia, favorable locations that minimize the LNG
transportation price. South Korea remains an energy-isolated
country that has no interconnecting pipelines with neighboring countries. Discussions have been conducted that have considered interconnecting an LNG pipeline with Russia, but this
plan deemed unacceptable because of national energy security
issues, especially with respect to North Korea.
The proposed ASG aims to interconnect countries in
northeast Asia with electricity generation areas in the Gobi
Desert. Such a "supergrid" would bring technical and political challenges because of its large geographical footprint.
The project remains under negotiation as the economic
opportunities are weighed against the political challenges.
An inadequate SPR rate in South Korea during recent
summer and winter periods has resulted in frequency control and stability problems in the power system. The problem will be solved with the addition of transmission and
generation facilities. Although the construction of new
transmission lines on exiting rights-of-way is not possible, a phased approach of undersea HVdc projects that
surround the main peninsula of South Korea appears to be
viable solution. Hydro, pumped storage generators, and
LNG generation will provide a more important role in frequency regulation. The addition of distributed small-scale
gas cogeneration systems will improve system performance
and will be fully considered under the electricity market
environment in South Korea. The economics of these distributed resources is dependent upon LNG prices and the
electric rate structure, which currently favors electrical
usage for heating systems.

Acknowledgments
The author would like to thank KPX, Korea Energy Economics Institute (KEEI), and the Ministry of Trade, Industry, and
november/december 2014

table 8. RCES systems in South Korea in 2002
and 2012 (source: South Korean Ministry of Trade,
Industry, and Energy).
Total
Capacity
(MW)

Public
Company

Private
Company

Mix
(%)

Capacity
(MW)

Mix
(%)

Capacity
(MW)

Mix
(%)

2002 53,801

100

50,571

3,230

2012

100

71,825

87.8

9,981

12.2

81,806

Energy. Special mention goes Dr. Roy Billington, emeritus
professor, University of Saskatchewan, Canada; Dr. Abdurrahim El-Keib, former prime minister of Libya; Dr. Jae
Hyung Roh, professor, Konkuk University, South Korea; and
Dr. Ki Joong Kim, senior research fellow in the Gas Policy Research Division of KEEI, South Korea, for providing
much of the data presented and for their valuable comments
and suggestions.

For Further Reading
Korea Energy Economics Institute (KEEI). (2013, Dec.).
2013 Energy Inf. Korea. [Online]. Available: http://www.kesis.net/flexapp/KesisFlexApp.jsp
J. Kwon, J. Choi, T.. Tran, A. A. El-Keib, and J. Watada, "Emissions constrained multi-criteria-best generation
mix using fuzzy dynamic programming," Int. J. Innovative Computing, Info. Contr., vol. 3, no. 1, pp. 41-52, Feb.
2007.
Korea Power Exchange (KPX), "Summary of the 6th basic plan for long-term electricity supply and demand (2013-
2027)," Annu. Rep., Dec. 2013.
KEEI, "Energy Consumption Forecasting in South Korea," vol. 14, no. 4, Dec. 2012.
Ministry of Trade, Industry and Energy, "The 11th longterm natural gas supply/demand plan (2013-2027) in South
Korea," Biannual Rep., Apr. 2013.
Ministry of Trade, Industry and Energy, "The 2nd national
basic energy plan report," MOTIE NBEP Rep., 2014.

Biography
Jaeseok Choi is with Gyeongsang National University, Jinju, South Korea.
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