South Korea Turns Back to Coal as LNG Crisis Deepens
Soaring prices of spot LNG supply amid the lack of Middle Eastern deliveries have pushed South Korea to rely more on coal-fired power generation in the coming winter, despite its pledge to shift away from fossil fuels. Like all other Asian importers, South Korea, the world’s third-largest LNG buyer after China and Japan, has been hit by the Middle East crisis and the lack of Qatari LNG supply.…
South Korea is reverting to coal-fired power as the cost of liquefied natural gas (LNG) skyrockets due to the Middle East crisis. Despite South Korea's commitment to reducing reliance on fossil fuels, the country is now turning to coal and nuclear power generation to cut gas consumption in winter. Minister of Climate, Energy, and Environment Kim Sungwhan revealed to Bloomberg that the short-term solution is to reduce LNG demand by rapidly expanding renewables and increasing the usage of nuclear and coal power.
Coal-fired power generation in South Korea surged by 40% in April, the largest increase since August 2019, driven by soaring spot LNG prices and the lack of Middle Eastern deliveries. As spot LNG prices reach four-year highs, electricity prices are expected to rise, making coal an economically viable option. The government has pledged to invest $747 billion in renewable energy, electric vehicles, and industry decarbonization by 2035, but energy security during the winter will be prioritized over the energy transition agenda.
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