Current Situation and Prospects of Energy Cooperation between Two Koreas Kyung Sool Kim Korea Energy Economics Institute Center for Energy Research, Northeast Asia
Jan 14, 2016
Current Situation and Prospects of
Energy Cooperation between Two Koreas
Kyung Sool Kim
Korea Energy Economics InstituteCenter for Energy Research, Northeast Asia
Very Limited Interactions So Far
Inter-Korean Energy Cooperation Projects
Sectoral Agenda for Inter-Korean Energy
Cooperation
Difficulties and Polices
Contents of Presentation
Very Limited Interactions So Far
Oil Supply to Kumkang Mountain Tourism Area
~ 2004: 50b/d 2005 ~ : 150b/d Gas Station and Auxiliary Facilities
Asphalt Supply for Road and Airstrip Construction
July 2005: Pitch 8,000ton Jan, 2006: Pitch 8,000ton
Oil Supply for Railroad Interconnection
2002. 10 ~ : 20b/d Storage Tank 3units,
Lubricator 3units
Humanitarian Aids for Ryong-Cheon Accident (2004)
Asphalt 2,000ton Gasoline 167ton Diesel 167ton
Energy Supply to Gaesung Industrial District
Demonstration District
(15 firms) 2004. 5 ~ : 220b/d Storage Tank: Light oil 400kl, LPG 30ton 3 LPG Companies Electricity: 15,000kW by Distribution
Expansion of Electricity Network
100,000kW by Construction of Transmission line(154kV) Under Construction
Energy Supply to Gaesung Industrial District
KOGAS once examined natural gas supply to Gaesung ID
Not fixed yet.
Major Inter-Korean Energy Cooperation Projects
Significant Suggestion
Trilateral Electricity Cooperation
KORUS Proposal
■ Transmit 2 million kW of electricity from Yangju substation in South to Pyungyang substation in North by way of the construction of transmission line
Significant Suggestion
Content & Concept
Cost Estimation
Effects Estimation
Construction of Transmission
Line
Power Generation and Transmission
Total
AC Interconnection
1.5billion US$ 3.9~8.1 billion US$
Generation cost: 50Won/kWh
Load Factor: 76%, Period: 6 ~ 10yrs
5.6 ~ 9.8 billion US$
HVDC1.7 billion US$
Significant Suggestion Cost & Effects
2003 S. Suggestion 2003 + S.S Effects
Capacity 7.77million kW 2 million kW 9.77million kW 1.257
Power Generation
19.6billion kWh17.52billion kWh
37.12billion kWh
1.894
Electricity supply per capita
870.3 kWh 777.9kWh 1,648.2kWh 1.894
Electricity demand/supply condition will be recovered more
than 1990 level N. Korea recorded the highest power generation in 1990 Current electricity supply problem will be totally solved Could be the turning point of national economic recovery
Significant Suggestion Effects
100 million kWh
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Russia, N. Korea, S. Korea
Russian suggestion for the electricity supply from Bureya hydro
power plant to South Korea pass through North Korea: Bureya
Plant – Khabarovsk – Vladivostok – Kraskino – Chongjin – S. Korea
1st Stage : Vladivostok - Chongjin
2nd Stage : Chongjin – S. Korea
Current status: Agreement on electricity network interconnection and electricity supply
between DPRK and Russia (02.4)
4th Three party meeting on Northeast Asia electricity network
interconnection (05.2): Main argument is on the pre-feasibility study in
DPR Korean area
Comprehensive research project by KERI (03~05)
Bureya HPP
Khabarovsk
Vladivostok
CHINA
DPRK
““Russia – DPRK Inter-connections”Russia – DPRK Inter-connections”
AC 500 Kv, 50Hz
«Vladivostok-Kraskino-Chhonjin»
Length ~ 380 km
Transmission ~ 600 MVA
1,500~2,500 million kWh/year
Construction Costs: 160~180mln USD
500 kV Vladivostok
250km
500 kV Kraskino
130km
Chhonjin
300~500MW
Source: ACE Engineering
Details of 1st stage
KORUS Pipeline Proposal
Proposed to import Russian (Sakhalin) natural gas to S. Korea by way of N. Korea Two different lines are suggested
Pipeline from Sakhalin to ROK by way of Khabarovsk , Vladivostok and N. Korea
Suggested as an post-KEDO alternative
Sectoral Agenda for Inter-Korean Energy Cooperation
Non-Physical Capacity BuildingEnergy market systemCoal SectorOil SectorElectricity SectorGas Sector
New & Renewable Energy SectorOther Sector
Energy Cooperation Agenda under Discussion
Cooperation for Non-Physical Capacity Building
Energy experts exchange
Education/Training N. Korean energy experts
Energy statistical system
Energy census and/or Surveys
Cooperation for the introduction of energy market system
Education/Training on commercial energy system
Education/Training on international energy market
Reform energy laws and regulations
Fostering private energy business firm
Energy Cooperation Agenda under Discussion
Cooperation Agenda in Coal Sector Cooperation in coal mine modernization projects Cooperation in the development of new coal mine Coal technology exchange Cooperation in the development of foreign coal mine Cooperation in import of coal from abroad
Cooperation Agenda in Oil Sector
Supply heavy oil to North Korea
Rehabilitation of idle refinery facilities Refine South crude oil in North refinery Cooperation in the construction of oil infrastructure Cooperation in physical distribution of oil Cooperation in the development of N. Korean oil resource
Energy Cooperation Agenda under Discussion
Cooperation agenda in Electricity Sector Electricity supply to Gaesung Industrial District Significant Suggestion to supply 2 mil.kW to DPRK Cooperation for the interconnection of grids Cooperation in Northeast Asian grid interconnection Rehabilitation of power generation facilities in North Modernization of N. Korean transmission and
distribution lines
Cooperation Agenda in Gas Sector
Natural gas Supply to Gaesung Industrial District
Cooperation for the diffusion of LPG in North Korea Cooperation in the construction of gas infrastructure Cooperation in Northeast Asian gas pipeline project
Energy Cooperation Agenda under Discussion
Cooperation agenda in NRSE (New & Renewable Sources of Energy) Sector Cooperation for N. Korean NRSE resources evaluation NRSE technology cooperation Cooperation in the development of demonstration
projects
Cooperation Agenda in Other Sector
Cooperation in energy efficiency improvement projects Energy /environment improvement projects
Difficulties
Policies
Energy Cooperation between Two Koreas
N. Korean Perspective S. Korean Perspective
Policy principle
Self reliance Commercial energy system
Regime Very sensitive to regimeWant to promote regime change
Investment Direct Assistance Private Investment
Approach Take-off at single effort Step by step approach
InteractionMinimize personal interaction
Maximize personal interaction
Different Perspectives on Inter-Korean Energy
Cooperation
Difficulties
N. Korean Restriction S. Korean Restriction
Lack of energy policy capability Unstable energy security
Non-commercial energy systemHarmony of energy and environment
Rigid policy principleInvestment for energy technology development
Poor energy statistical system Modernization of energy industry
Linked energy issues with
external politics
High energy consuming industrial structure
Lack of capital and technology
Different Restrictions of Energy Sector
Difficulties
Principles Policies
Principle of reciprocity Minimize free grant Commercial investment
Public consensus
Priorities in cooperation for people’s living Parliament agreement for government's fund
Principle of integrated energy system
Respect N. Korean system Intend to integrated energy
infrastructure in Korean peninsula
Government's role
Official talks and negotiation Create cooperative environment Tuning laws and regulations Suggest guide and directions
Principles and Policies
Policies
Preparation for the Future Cooperation
Current Status
Research & develop various cooperative projects Government, research institutes, private firms, organizations Wide spectrum of cooperation agenda
Almost all of them are not implacable owing to; Closed characteristics of N. Korean society Delay of system change to market mechanism Undulation of South/North Korean relations Lack of information on N. Korean energy sector
Preparation for the Future
Blue print for inter-Korean energy cooperation Government/private sector Overall/sectoral
Expand contact and communication Enhance energy policy capability Build-up mutual trust and credibility Guide to modern energy system
THANK YOU VERY MUCH
Korea Energy Economics InstituteCERNA (Center for Energy Research, Northeast Asia)