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FKCCI members discuss energy prices for the first France-Korea Energy Committee of 2023

FKCCI members discuss energy prices for the first France-Korea Energy Committee of 2023

The year 2023 should mark substantive changes for the Korean energy sector. In light of Yoon Suk Yeol’s government’s recently approved basic plan for electricity and renewable energy strategy, as well as current crises’ consequences on the Korean energy market, the French Korean Chamber of Commerce and Industry held its first Energy Committee of the year on January 19th 2023. 

The Energy Committee is organized quarterly by the Chamber and designed to gather its energy sector-focused members over shared insights. This edition welcomed 17 C-level executives from major French and foreign companies and was the first in the presence of Mr. Henri Bacquet, FKCCI’s new CEO since January 2023. 

Following a networking session, Mr. Guillaume Horn, Head of the Committee and CEO of Framatome Korea, welcomed the participants before passing the mic to Mr. Vince Heo, Director at S&P Global. Mr. Heo delivered an enlightening presentation about “Power price mechanisms and trends in Korea”, with a focus on the RE industry. 

Indeed, all eyes are focused on skyrocketing energy prices which affect both industries and households. The wholesale power price (dubbed System Marginal Price, SMP, in Korea) is mainly affected by liquified natural gas (LNG) import price and the surge of LNG fuel prices has brought SMP to a record high which started to increase sharply from January 2022. This led the MOTIE to introduce a price cap in December 2022 due to the financial difficulties of KEPCO, the largest electric utility in Korea. As for the retail power price, it has also been upward pressure and is starting to affect industry price, as KEPCO has to increase it to cover for its losses.  

Participants could also discuss trends in the clean energy market, for which MOTIE made effective since September 2022 the direct power purchase agreement (“PPA”) system, under which renewable energy power suppliers are able to supply electricity generated from renewable sources directly to electricity consumers. Such initiative aims to boost new RE installations, however Korea would have to fasten its pace to meet its National Determined Contribution (NDC) under the Paris Agreement to reduce carbon emissions at a satisfying level. For example, annual additional wind and solar capacity would have to grow respectively by 2.3 GW and 3.2 GW, so 20 times faster than the current pace in the case of wind energy. In this context, nuclear power would be the main way to meet NDC commitment under the current administration’s policy.  

The presentation was followed by an animated round table, during which participants discussed future collective actions of the committee to foster French-Korean collaboration in the energy sector. 

 

About the Energy Committee 

 

The France-Korea Energy Committee is led by Mr. Guillaume Horn, Head of Framatome Korea, and coordinated by Mrs. Oriane Lemaire, General Secretary of the Committee and Head of Communications at FKCCI. 

For any inquiry on the work of the committee, please contact o.lemaire((@))fkcci.com

To join FKCCI sectoral committees, join our Membership program and contact membership((@))fkcci.com

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France-Korea Energy Committee discusses Korea’s new energy strategy

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