Forum to be held on 'Energy Crisis and Electricity Rates: Market Improvement Tasks'

Hankyoreh is convening a crucial forum on May 6th to dissect the complex issues surrounding the escalating energy crisis and the urgent need for reform in electricity pricing and market mechanisms. As the Middle East conflict sends shockwaves through global energy markets, driving up oil and LNG prices and threatening supply stability, South Korea finds itself at a critical juncture.

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The energy crisis is escalating, and there is a growing voice that fundamental solutions lie in reducing coal and LNG power generation, expanding renewable energy, and normalizing electricity rates to induce rational energy consumption.

The forum, titled 'Energy Crisis and Electricity Rates: Market Improvement Tasks,' will bring together a diverse group of stakeholders—academics, researchers, industry leaders, public corporations, and government officials. They will delve into the immediate impacts of the conflict, such as the government's measures like implementing a maximum price for refiners and urging energy conservation. Of particular concern is the increased reliance on coal and nuclear power to offset the high cost of LNG, which constitutes 30% of domestic power generation.

A central theme will be the debate over electricity rates. Despite concerns about mounting deficits at Korea Electric Power Corporation (KEPCO) due to tariffs below generation costs, the government has maintained a policy of not raising rates. This approach is contrasted with the growing calls for rate normalization to encourage rational energy consumption and reduce KEPCO's financial burden. The article highlights the political pressures that have historically influenced electricity pricing, often prioritizing short-term concerns over long-term market health, a situation exacerbated by past crises like the Russia-Ukraine war which saw KEPCO's debt skyrocket.

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If electricity rates continue to be postponed from normalization, KEPCO's debt will surge to the 300-400 trillion won level, and overcoming the energy crisis will become difficult.

The discussion will also extend to broader market reforms, including the transition to renewable energy and the restructuring of the power market to foster competition and innovation. The need for independent and expert-led regulatory bodies, such as the proposed Electricity Supervision Agency, is emphasized to ensure that reforms are effective and sustainable. This forum represents a vital platform for forging a social consensus on energy policy, moving beyond political divides to secure a stable and efficient energy future for South Korea.

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The 'Social Consensus for Energy Justice Forum' was launched in 2022 with the aim of achieving social consensus for the future and descendants, moving away from political approaches centered on political parties, ideologies, and factions, in order to succeed in carbon neutrality and energy transition.