Don't pass buck to next government
The Moon Jae-in administration is determined to wean the Republic of Korea off nuclear power despite the people's concerns about the possible hike in electricity bills, even though it still wants to export reactors and related technologies.
The government nuclear phase-out policy will decrease the number of nuclear reactors in operation from 24 to 18 by 2030. As an initial action program, the Korea Hydro & Nuclear Power (KHNP) will shut down Wolsong-1, the country's oldest reactor, at once, even before the end of its extended operational life cycle. It will also scrap a plan to build four new reactors.
In return, the government said it would compensate the KHNP for financial losses incurred by its first measures under the "energy transformation road map" for the eventual halting of nuclear power production in the country.
The question is the source of the compensation money. The state-run nuclear power producer already spent 592.5 billion won ($536 million) to improve its facilities to get the administration's approval for an additional 10-year operating license for the Wolsong-1 reactor.
The government plans to use the power industry reserve fund which is a quasi-tax of 3.7 percent on electricity costs paid by the people. Namely, the government is to shift the cost of scrapping nuclear power plants to the people. Taking into consideration the loss of power production from the early closure of the reactors, the losses will snowball. The demolition costs of the canceled four new reactors amounts to 90 billion won.
It is crystal clear that a rough-and-ready shift to a high-cost energy structure in a country that does not produce a single drop of oil will eventually deal a severe blow to the national economy. It is a well-known fact that the production cost of nuclear power is lowest of all.
Reducing reliance on nuclear and coal-fired plants means a higher dependence on high-cost power like oil and liquefied natural gas (LNG), making the people's burden heavier. The government said it would not raise electricity rates during its term. But this promise means it is passing the buck to the next government.
The Moon Jae-in administration is determined to wean the Republic of Korea off nuclear power despite the people's concerns about the possible hike in electricity bills, even though it still wants to export reactors and related technologies.
The government nuclear phase-out policy will decrease the number of nuclear reactors in operation from 24 to 18 by 2030. As an initial action program, the Korea Hydro & Nuclear Power (KHNP) will shut down Wolsong-1, the country's oldest reactor, at once, even before the end of its extended operational life cycle. It will also scrap a plan to build four new reactors.
In return, the government said it would compensate the KHNP for financial losses incurred by its first measures under the "energy transformation road map" for the eventual halting of nuclear power production in the country.
The question is the source of the compensation money. The state-run nuclear power producer already spent 592.5 billion won ($536 million) to improve its facilities to get the administration's approval for an additional 10-year operating license for the Wolsong-1 reactor.
The government plans to use the power industry reserve fund which is a quasi-tax of 3.7 percent on electricity costs paid by the people. Namely, the government is to shift the cost of scrapping nuclear power plants to the people. Taking into consideration the loss of power production from the early closure of the reactors, the losses will snowball. The demolition costs of the canceled four new reactors amounts to 90 billion won.
It is crystal clear that a rough-and-ready shift to a high-cost energy structure in a country that does not produce a single drop of oil will eventually deal a severe blow to the national economy. It is a well-known fact that the production cost of nuclear power is lowest of all.
Reducing reliance on nuclear and coal-fired plants means a higher dependence on high-cost power like oil and liquefied natural gas (LNG), making the people's burden heavier. The government said it would not raise electricity rates during its term. But this promise means it is passing the buck to the next government.
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