S Korea to convert half of existing coal fleet to gas

Market: Coal, Electricity
11/05/20

The closure or conversion of ageing South Korean coal-fired power plants could cut power sector consumption by 19mn-28mn t/yr by 2034, although the decline may be slowed in the near term by the start-up of new plants in the next five years.

South Korea plans to shut a total of 15.3GW of coal-fired capacity by 2034, according to a draft of the country's ninth basic electricity plan released on 7 May, of which 12.7GW will be switched to run on LNG. South Korean state-owned Kepco utilities currently operate 33.7GW of coal capacity across 56 units.

Some 30 of those coal units that reach 30 years of service by 2034 will be retired, 24 of which will be converted to run on natural gas, according to the draft. The exact units to be converted were not specified, but are likely to comprise power plants earmarked for conversion by the five individual state-owned utilities.

The existing eighth electricity plan already includes the conversion of the 500MW Dangjin 1 and 2 units to run on gas in 2029, with the 560MW Samcheonpo 3 and 4 units to be retired in March 2023 and the 500MW Taean 1 and 2 units scheduled to close in 2025.

In addition, Korea East-West Power has proposed the conversion of its 500MW Dangjin 3 and 4 in 2030, according to board meeting notes published on its website.

Fellow state-owned utility Korea South East Power (Koen) has proposed converting its 500MW Samcheonpo units 5 and 6 in July 2027 and January 2028, respectively, and its 800MW Youngheung units 1 and 2 in June 2034 and December 2034. Koen's 560MW Samcheonpo units 1 and 2 are already scheduled to retire as part of the eighth plan.

Korea Southern Power (Kospo) plans to convert a total of 3GW of ageing coal capacity across six units in 2026-31. Kospo's meeting notes do not specify the exact units to be converted, but the 500MW Hadong units 1-6 are the oldest in its fleet. Kospo is already scheduled to retire its 250MW Honam units 1 and 2 in January 2021.

Korea Western Power's (Kowepo) 500MW Taean units 3 and 4 have been proposed for conversion to LNG in December 2032 and Korea Midland Power's (Komipo) 500MW Boryeong units 5 and 6 in December 2024 and December 2025, respectively. The 500MW Boryeong units 1 and 2 are scheduled to close in December this year as part of the eighth plan, but Komipo has decided to convert the units to run on LNG in December 2026, according to board meeting minutes.

But despite the swathe of plant retirements and fuel conversions, seven new coal units are currently under construction with a combined capacity of 7.26GW. This means that South Korea's installed coal capacity will likely peak around 2024-25, potentially slowing the decline in coal burn until later this decade.

State-owned utilities consumed 83.3mn t of coal (with an unspecified calorific value) to generate 226.8TWh in 2019, according to Kepco data. This represented a 71pc utilisation rate of the country's state-owned fleet, down from 75pc in 2018. Coal-fired load factors may remain under pressure in the coming years, as the government has pledged to restrict the use of coal plants to improve air quality during the peak winter heating season each year. Increasingly competitive gas prices and rising nuclear and renewable capacity may also stem the use of coal plants.

If the use of South Korea's installed state-owned coal capacity ranges between 60pc and 70pc, annual coal consumption for power could drop to as low as 53mn-62mn t/yr in 2034, according to Argus analysis. But annual power sector demand is set to average around 80mn t/yr in the next five years, assuming a 70pc average load each year, as new capacity additions will outpace retirements in the near term. But the record 89.3mn t of consumption recorded in 2018 may be unlikely to be repeated.

Ninth plan targets renewables growth

The government — recently strengthened by the success of President Moon Jae-in's party in last month's national assembly elections — is targeting a 62.3GW increase in renewable capacity by 2034, in line with a previous target set out in the third energy plan.

This would bring total renewable capacity to around 79GW, which the government expects to represent around 40pc of the country's installed capacity, compared with 15pc now. The ninth plan sees coal, nuclear and gas-fired capacity accounting for 14.9pc, 9.9pc and 31pc, respectively, by 2034.

The increase in renewable generation would offset declines in coal, gas and nuclear generation and cater for growth in overall power demand. The eighth plan targeted a 24 percentage point increase in renewables' share of power generation to 33.7pc by 2030, with coal, gas and nuclear shares falling by around nine, five and seven percentage points. The targets in the ninth plan — to be confirmed in the second half of the year — may now be even tougher on coal.

By Evelyn Lee and Jake Horslen

Change in Korean generation mix 2019-34 GW

South Korean coal burn vs installed capacity mn t, GW

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

17/04/25

IMF anticipates lower growth from US tariffs

Washington, 17 April (Argus) — Economic growth projections set for release next week will include "notable markdowns" caused by higher US tariffs that have been disrupting trade and stressing financial markets, IMF managing director Kristalina Georgieva said today. The IMF earlier this month warned that the tariffs that President Donald Trump was placing on trading partners could pose a "significant risk" to the global economy. Those higher trade barriers are on track to reduce growth, raise prices for consumers and create incremental costs related to uncertainty, the IMF plans to say in its World Economic Outlook on 22 April. "Our new growth projections will include notable markdowns, but not recession," Georgieva said Thursday in a speech previewing the outlook. "We will also see markups to the inflation forecasts for some countries." Trump has already placed an across-the-board 10pc tariff on most trading partners, with higher tariffs on some goods from Canada and Mexico, a 145pc tariff on China, and an exception for most energy imports. Those tariffs — combined with Trump's on-again, off-again threats to impose far higher tariffs — have been fueling uncertainty for businesses and trading partners. The recent tariff "increases, pauses, escalations and exemption" will likely have significant consequences for the global economy, Georgieva said, resulting in a postponement of investment decisions, ships at sea not knowing where to sail, precautionary savings and more volatile financial markets. Higher tariffs will cause an upfront hit to economic growth, she said, and could cause a shift in trade under which some sectors could be "flooded by cheap imports" while other sectors face shortages. The IMF has yet to release its latest growth projections. But in January, IMF expected global growth would hold steady at 3.3pc this year with lower inflation. The IMF at the time had forecast the US economy would grow by 2.7pc, with 1pc growth in Europe and 4.5pc growth in China. The upcoming markdown in growth projections from the IMF aligns with analyses from many banks and economists. US Federal Reserve chair Jerome Powell on 16 April said the recent increase in tariffs were likely to contribute to "higher inflation and slower growth". Those comments appear to have infuriated Trump, who has wanted Powell to cut interest rates in hopes of stimulating growth in the US. "Powell's termination cannot come fast enough!" Trump wrote today on social media. Powell's term as chair does not end until May 2026. Under a longstanding US Supreme Court case called Humphrey's Executor , Trump does not have the authority to unilaterally fire commissioners at independent agencies such as the Federal Reserve. Trump has already done so at other agencies such as the US Federal Trade Commission, creating a potential avenue to overturn the decision. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Japan to develop geothermal power under net zero plan

16/04/25

News

16/04/25

Japan to develop geothermal power under net zero plan

Osaka, 16 April (Argus) — The Japanese government is gearing up to develop geothermal energy, as the clean power can help to decarbonise the power sector with stable output, unlike weather-dependent renewables such as solar and wind. The trade and industry ministry Meti on 14 April launched a public-private council to discuss the development of next-generation geothermal energy, aiming to formulate a draft guideline, including capacity and cost targets, by around October this year. The new technology could lift the country's potential geothermal capacity to at least 77GW, compared with 23.5GW based on conventional methods, according to the council. The draft plan aims to establish the next-generation geothermal technology as early as the 2030s, to expand the use of the clean energy with competitive prices toward 2040, while tacking geological challenges, such as fault and complex geology, in Japan. Should the next-generation technology, such as closed-loop and supercritical geothermal, prove practical, Japan could utilise its potential, said Meti minister Yoji Muto on 15 April. Japan could consider exporting the next-generation technology globally, as it has around 70pc global share in conventional geothermal turbines, he added. The geothermal strategy is in line with the country's new strategic energy plan (SEP) , which was published in February, as well as prime minister Shigeru Ishiba's push to develop geothermal capacity. Ishiba had focused on less-utilised and high potential geothermal, as well as micro-hydropower, during his [campaign for the ruling Liberal Democratic Party presidential election](https://direct.argusmedia.com/newsandanalysis/article/2608517) last year. The SEP assumes geothermal will account for 1-2pc of Japan's power mix in the April 2040-March 2041 fiscal year, which is relatively marginal compared with other renewables such as solar at 23-29pc, wind at 4-8pc, hydroelectric at 8-10pc and biomass at 5-6pc. But even the small share would be much higher compared with its actual share of 0.3pc of total power generation in 2023-24. Diversification of renewable power sources would be necessary to achieve Japan's plan to reduce its greenhouse gas emissions by 60pc in 2035-36 and by 73pc in 2040-41, respectively, against the 2013-14 level, before achieving its net zero goal in 2050. Under the SEP, Tokyo aims to reduce its dependence on thermal power to 30-40pc in 2040-41 from 71pc in 2024. Japanese private firms are already involved in further developing domestic and overseas geothermal projects. Japanese utility Hokkaido Electric Power and construction firm Obayashi said on 16 April that they will study potential geothermal resources in Hokkaido during April 2025-February 2026, taking advantage of subsidies provided by state-owned energy agency Jogmec. Japanese battery maker Panasonic Energy said on 8 April that it has signed a power purchase agreement with regional utility Kyushu Electric Power's renewable arm Kyushu Mirai Energy to secure around 50GWh/yr of geothermal-based electricity from 1 April. The stable geothermal supplies, unaffected by weather, could double a renewable ratio in its domestic power consumption to around 30pc, Panasonic said. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Dozens of US coal plants eligible for MATS extension

15/04/25

News

15/04/25

Dozens of US coal plants eligible for MATS extension

Cheyenne, 15 April (Argus) — The White House has identified more than 60 fossil fuel-fired power plants that will have two extra years to comply with the more stringent mercury and air toxics standards (MATS) finalized in 2024. Under a proclamation signed by US president Donald Trump last week, the plants on the list will be able to operate under whatever existing mercury and air toxics standards they currently are subject to until 8 July 2029. That is two years after the compliance deadline put in place in May 2024. The Environmental Protection Agency (EPA) rules finalized last year tightened mercury and air toxics standards for coal- and oil-fired units by 67pc, included new emissions-monitoring requirements and added standards for lignite-fired coal plants that put them in line with those for other coal plants. EPA in March said it was reviewing the new standards and said companies could seek exemptions to the mercury rule and other emissions rules. Trump followed that up last week with a proclamation that certain generating facilities would be given a two-year exemption in complying with the 2024 rule. The White House released the list of exempt power plants late on 14 April. Most of the plants on the list are coal-fired generators, some of which were scheduled for retirement by the end of 2027. These include Tennessee Valley Authority's Kingston plant and one unit of its Cumberland plant, as well as Vistra Energy's Kincaid, Baldwin and Newton plants and two coal units of Vistra's Miami Fort plant. The two coal units at Southern Company's Victor J Daniel plant in Mississippi also have been exempted from the new mercury and air toxics rules for two years. Southern had planned on retiring those units by the end of 2027, but in February, the Mississippi Public Service Commission approved two special contracts that were expected to need unit 2 of the Daniel plant and possibly a unit of a natural gas plant to run into the 2030s. Some other coal plant units owned by Southern, TVA and Vistra also are now exempt from the July 2027 mercury and air toxics compliance deadline. So are some plant units owned by East Kentucky Power Cooperative (EKPC), NRG, Ameren and Entergy. At least two natural gas plant units — unit 5 of Southern's Plant Barry and City Utilities of Springfield's John Twitty Energy Center, which has coal and natural gas generation — are exempt from the July 2027 deadline. So is unit 5 of Entergy's RS Nelson plant, which runs on petroleum coke. Essentially all of the other units in the White House's list are coal units, including Otter Tail Power's Big Stone and Coyote Station plants in North Dakota. Otter Tail said it had requested the exemptions "to avoid making unnecessary expenditures" if EPA decides to roll back the 2024 rule. EKPC said it was "grateful" its request to exempt the Spurlock and Cooper coal-fired power plants in Kentucky was granted and that the company "will continue to operate the plants in accordance with all market and environmental rules." NRG said it was still reviewing the order, but did not expect it to have any effect on its plans. TVA, Southern, Vistra and owners of other power plants given compliance extensions did not respond to requests for comment. By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Australian coal methane emissions under-reported: Ember

15/04/25

News

15/04/25

Australian coal methane emissions under-reported: Ember

London, 15 April (Argus) — Australian coal miners emitted 40pc more methane in 2020 than they reported, energy think-tank Ember said in a review of satellite data released today. The organisation, along with energy intelligence company Kayrros, analysed methane emissions from four mining "clusters" in Queensland in 2020, which account for roughly three fourths of the state's thermal coal and almost all of its coking coal production. The investigators found "a total of 1.42 ± 0.19 million tonnes of methane released from coal mines" in that year. Miners in the state reported 1.01mnt of methane emissions during the same period. The difference between reported and actual emissions was much larger in New South Wales, Ember said. "While the state reported 379,000t of methane in 2020, our satellite study identified 721,000t of methane that year, while only accounting for approximately 61pc of the state's coal production," the organisation said. If all coal mines in New South Wales followed the same trend, this would suggest total methane emissions of 1.2mn t, more than three times the figure producers reported to the government. Ember are not the only organisation criticising Australia's official numbers. Climate Trace and Open Methane, two organisations monitoring greenhouse gas emissions by satellite, suggest that Australian coal miners are only reporting half of their methane emissions. Academics supported by the UN Environment Programme (UNEP), writing in the American Chemical Society, published an article this year saying that trading company Glencore's Hail Creek mine was emitting four to five times more methane than it reported. Glencore sharply criticised the Hail Creek report, saying the study's aerial surveys lacked credibility because they were based on very limited samples and did not consider "inherent mining variability." The firm said that the report "failed to detect methane emissions" that it had reported itself. The producer, one of the country's largest, has repeatedly criticised satellite measures of methane emissions. The method, the firm said in a 2022 statement, is vulnerable to "atmospheric contaminants such as dust, water vapour or smoke" and cannot reliably detect the amount of greenhouse gases coming from mines. The Australian government launched a review of their methane reporting last year in light of the new satellite techniques used by researchers. The UK and EU are both planning a carbon tax on imported goods called the Carbon Border Adjustment Mechanism (CBAM) in the next two years. If either government were to accept Ember's figures, they could theoretically raise taxes on imported steel made with Australian coking coal. Neither government plans on taxing coal imports directly under CBAM. By Austin Barnes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Indonesian coal producer Bukit Asam to raise 2025 capex

15/04/25

News

15/04/25

Indonesian coal producer Bukit Asam to raise 2025 capex

Manila, 15 April (Argus) — Indonesian state-owned coal producer Bukit Asam has increased its 2025 capital expenditure (capex) plan from a year earlier, as it focuses on completing key projects to support its expansion plans. The company said it has earmarked 7.2 trillion Indonesian rupiah ($428mn) as the capital expenditure (capex) plan for this year, a more than three-fold increase from last year's Rp2.35 trillion. Bukit Asam will fund around 80pc of the capex via loans while the remainder will be from the company's own coffers. The company said that it is able to be more aggressive with loans since it has a healthy debt-to-equity ratio of 0.6. The bulk of the capex will be used for the completion of the Tanjung Enim-Kramasan coal railway system, a key infrastructure project to allow the company to increase its coal production. The commercial operation of the railway project will boost the company's transportation capacity by another 20mn t/yr of coal. Construction of the railway project started in 2023 with a target to operationalise the line in 2025, but the project ran into delays. Bukit Asam is now targeting to open the line by the third quarter of 2026. This will be in line with the company's long-term plan of boosting output to 100mn t/yr by 2030. Bukit Asam is also increasing investments in its downstream project, in line with the government's push to develop the downstream coal industry. It has already partnered with Indonesia's National Research and Innovation Agency to develop artificial graphite sheets using Bukit Asam's coal. The pilot project has seen moderate success, but improvements are still needed to reach economic feasibility. Additional funds would help to improve conductivity and density to reach international standards, with the goal of commercial operations by 2028. The project is important for Bukit Asam, as it sees an increase in usage for artificial graphite sheets, ahead with the rising popularity of electric vehicles that would make Li-ion battery parts manufacturing an attractive coal downstream avenue. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more