Renewable energy is becoming a crucial factor for national competitiveness, influencing geopolitical influence, national security, industrial leadership, access to financing, and public well-being. According to the recent report by International Institute for Energy Exconomics and Financial Analyisis (IIEFA). The report found that, despite pledging to achieve net-zero emissions by 2050, South Korea’s renewable energy accounted for only 9.64% of its power generation mix in 2023, significantly below global averages.
South Korea’s 11th Basic Plan for Long-Term Electricity Supply and Demand (BPLE) still prioritizes fossil fuels and speculative Small Modular Reactors (SMRs), even though the country aims to reduce its reliance on LNG. This strategy, intended to meet the growing power demand from semiconductor clusters and Artificial Intelligence (AI) data centers, could be high-cost, high-risk, and high-carbon.
According to IIEFA recent report, “Using LNG-fired electricity to power these sectors exposes South Korea to substantial trade and financial risks amid global decarbonization trends like the RE100 initiative, the Carbon Border Adjustment Mechanism (CBAM), and Scope 1, 2, and 3 regulations.”
It recommends that by tripling its renewable energy capacity, as pledged at the 2023 United Nations Climate Change Conference (COP28), South Korea can meet the increasing electricity demand from semiconductor clusters and AI-driven data centers, ensuring global competitiveness.
In contrast to the global trend where renewable energy generated 30% of the world’s electricity in 2023, South Korea’s share was just 9.64%, far behind the global average (30.25%), the OECD average (33.49%), and even Asia’s average (26.73%). This report finds that tripling renewable energy by 2030 could fully meet the increased electricity demand from these emerging sectors.
Despite the goal of reducing LNG reliance, the BPLE guideline continues to prioritize fossil fuels and speculative SMRs. This approach could prove to be a high-cost, high-risk, and high-carbon strategy. While renewable energy could meet the additional electricity needs of the AI and semiconductor sectors. Tripling renewable energy capacity by 2030 could generate 113,434 gigawatt hours (GWh) of renewable power, far exceeding the projected power demand increase of 53,168 GWh. Ultimately, a renewable generation and storage portfolio tailored to key growth industries will be critical for achieving carbon neutrality by 2050.
It highlighted that, South Korea’s excessive reliance on fossil fuels creates vulnerabilities beyond environmental damage. Renewable energy is now the frontline of global competitiveness, affecting geopolitical influence, national security, industrial leadership, access to financing, and public well-being.
Key Recommendations:
- Reduce reliance on fossil fuels and expedite the transition to clean energy sources.
- Meet the COP28 pledge of tripling renewable energy by 2030, rather than continuing fossil-fuel-based power generation for semiconductor clusters and AI data centers.
- Implement stronger policy measures to accelerate renewable power deployment, with a cohesive and holistic policy framework.
- Accelerate the renewable energy transition to safeguard geopolitical influence, national security, industrial leadership, access to financing, and public well-being.
