Key facts
- South Korea plans to increase coal-fired power generation this winter.
- Soaring spot LNG prices and reduced Middle Eastern deliveries are driving the shift.
- Coal-fired power supply in South Korea increased by 40% in April.
- The government plans to invest $747 billion in renewables and decarbonization by 2035.
Soaring spot liquefied natural gas (LNG) prices and a lack of Middle Eastern deliveries have prompted South Korea to increase its reliance on coal-fired power generation for the upcoming winter. The country, the third-largest LNG buyer globally, is facing uneconomical gas-fired plant operations compared to coal due to the current market conditions. Climate, Energy and Environment Minister Kim Sungwhan indicated that reducing LNG demand is a short-term necessity, which will involve greater utilization of nuclear and coal power alongside renewables. In April, South Korea's coal-fired power supply saw a significant 40% jump, the largest since August 2019. Despite these short-term measures, the government has unveiled plans to invest up to one quadrillion Korean won ($747 billion) by 2035 in renewable energy, electric vehicle adoption, and industrial decarbonization to address energy security and regulatory concerns.