South Koreas energy industry can be demonstrated over the past few decades by the nuclear power arena which has been a bedrock for economic development as it provides over a quarter of their energy (25.3% in 2019). The World Nuclear Association named South Korea the “worlds most prominent nuclear energy country” (WNA, 2022) due to their cost-effective and highly reliable nuclear efforts which boost their economy through trade. However, there are serious risks and implications within and out-with the country causing controversy and posing the question – is nuclear power the most viably acceptable method of energy that will be able to contribute to economic growth and livelihood without any repercussions?. This blog sets out to illustrate the argument within this by examining differing energy options through development of nuclear energy over time and its impact on the political economy. Further analysed by diving into the geopolitics surrounding South Korea and how varying implications have progressed the energy industry.
The nuclear programme of SK has helped accelerate economic growth and development over the past few decades as they have excelled on the international stage by supplying nuclear reactors to countries like UAE and Turkey (Sirin, 2010) creating a reliable source of revenue. Through the countries geopolitical surroundings, neighbouring countries have played a major front seat role in the journey of South Koreas nuclear programme. In particular North Korea’s strong stance on nuclear has led SK to view nuclear energy as an essential component of its national security strategy, leading to significant investment in the countries expansion of nuclear power plants. Further boosting their economy and development through the acquisition of nuclear technology and expertise from other countries. However, their nuclear energy industries growth raised some tensions between neighbours China and the US – who are slightly uneasy with the nuclear reactors located just outside the borders (find a stat or fact of tensions – which impacts the economy). These safety concerns by citizens within and surrounding South Korea were exacerbated in the aftermath of the 2011 Fukushima disaster in Japan, which due to a natural disaster, shut down nuclear reactors and caused a loss of power.
The radioactive harmful waves that came from the Fukushima disaster caused widespread environmental damage and led to the evacuation of over two-hundred thousand people costing around $200 billion in damages and a loss of public confidence in nuclear power globally. This caused Japan to stop all nuclear power plants and instead have increased reliance on gas. Raising alternative ideas the public supported in the tiger state South Korea as the country is prone to natural disasters such as earthquakes there and the economy cannot afford to take such high risks. However, alternative energy such as gas has a worse track record and so is of greater risk than nuclear as nuclear power has yet to record a single fatality (Hong, 2018) and the sheer price of gas makes it not economically viable to have gas-based power systems (van de Ven & Fouquet, 2017). Furthermore, South Korea do not have their own domestic gas reserves meaning they will rely heavily on a single high price volatility source which will clearly damage the economies safe condition. Suggesting gas is not a reliable alternative to nuclear power as it poses a much greater risk to health and the economy.
In the aftermath of the Fukushima disaster internationally, some countries reduced nuclear power such as Germany who shut down all of their seventeen nuclear reactors which is in complete contrast with South Korea who instead increased their construction of reactors and pursued more export opportunities. This was achieved as public opinion surrounding nuclear energy – even after the impact of the Fukushima disaster – has continuously been politically driven resulting in them becoming increasingly polarized. Meaning with political leaders framing nuclear power as a key tool for green growth, SK were able to advance their nuclear industry and boost their economy further. As evidently shown by scholars who agree countries with rapid economic growth rates bet on nuclear energy in anticipation of growing demand (Abdenur, 2014) highlighting the importance of economic considerations for advancing nuclear power.
Despite SK being successful in developing nuclear technology it was not quick enough to establish a legal framework in dealing with radioactive waste taking a hit on the countries economy. In the 1970s trade was tariffed by other countries (Canada and US) in which regulatory requirements were applied as mandatory requirements for construction permits. These discrepancies in the project led to a “huge loss of funding” (Kang, 2008) and it was not up until the 1990s that their standards matched those of internationally. However, despite the radioactive waste issue, nuclear energy has often been depicted as a ‘clean’ energy source as evidence from the US Energy Secretary Ernest Moniz shows, nuclear energy represents around 60% of carbon-free electricity generation in the US (Moniz, 2016) . This advances the South Korean governments objectives as their promotion of nuclear energy allows them to maintain control of the national economy. Evidence of the low unit cost of nuclear energy compared to others such as coal and renewable energy sources can be seen in the chart below which also shows the significantly high (193.12 KRW/kwh) units oil produces.
Picture from (Joo-Kang, 2022).
South Korea is 14th country internationally to legislate a carbon target, with an attempt for a 40% reduction from 2018-2030 and carbon neutrality by 2050. Since taking office in 2017, President Moon Jae-in opened a new chapter in South Korea’s nuclear energy politics as he planned to gradually phase out nuclear power. He fought not for the dangerous profit SK had been previously but instead put the safety of citizens at the forefront. The proposition applied to achieve this is known as the Korean Green New Deal framework in which the SK government will use both public and private finance to expand the capacity of generating energy (Oh, 2021). Ultimately the goal of SK’s new energy policy is to create an affordable and reliable supply system using alternative methods than nuclear due to its dangers. More recently, the election of President Yoon Suk-yeol in 2022 saw him scrap this previous policy for denuclearisation and instead set a target for nuclear power to provide a minimum of 30% of their electricity in 2030 (WNA, 2022) creating greater uncertainty and damage to the economy as the halts and re-opening of nuclear reactors results in greater damages to the environment and is increasingly costly.
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References
Abdenur, A. &. (2014). Nuclear Energy and the BRICS: Competition and contestation in South Africa. Georgetown Journal of International Affairs, 55-66.
Association, W. N. (2022, November ). Nuclear Power in South Korea. Retrieved from World Nuclear Association : https://world-nuclear.org/information-library/country-profiles/countries-o-s/south-korea.aspx
Hong, S. &. (2018). At the crossroads: An uncertain future facing the electricity‐generation sector in South Korea. Asia & the Pacific Policy Studies, 522-532.
Joo-Kang, M. (2022, November 24). In Charts: South Korea’s new energy strategy which has nuclear at its core. THINK – Economic and Financial Analysis.
Kang, S. (2008). Lessons Learned From the Development of Korean Nuclear Power Programme. Nuclear Power Engineering Section – IAEA.
Moniz, E. (2016, October 24). Nuclear Energy at a crossroads. Retrieved from The Centre for Strategic and International Studies: https://www.csis.org/search?search_api_views_fulltext=nuclear%20energy&sort_by=search_api_relevance.
Oh, H. &. (2021). South Korea’s 2050 Carbon Neutrality Policy. East Asian Policy, 33-46.
Sirin, S. (2010). An assessment of Turkey’s nuclear energy policy in light of South Korea’s nuclear experience. Energy Policy, 6145-6152.
van de Ven, D. &. (2017). Historical energy price shocks and their changing effects on the economy. Energy Economics , 204-216.