Coyner’s Comment:
When one considers that South Korea imports at least 97% of its energy, the past and current government policies to indirectly subsidize electricity via a money-losing public corporation, KEPCO, just doesn’t make a lot of sense, now that the country is no longer a developing economy.
Furthermore, much of South Korea’s green initiatives are collectively a bit of a sham. They offer new business incentives to come up with energy-efficient products without doing anything of substance to save energy. What measures taken are laughable. For example, most large office and public buildings keep half of their front doors locked so that both paired doors may not swing open. The theory is to save energy. But usually there are large gaping cracks around both doors and the windows are not insulated. What little, questionable energy savings achieved by inconveniencing pedestrians is vastly offset by mindless other energy sinks within the building. But the locked doors are highly visible for all to see.
Also, the best “open for business” signal for most stores is with opened doors that send out heat during the cool months and air-conditioning during the warm months. The store owners are not stupid. At subsidized energy costs they can afford the practice and they dare not look “closed for the day” given the stiff competition. And at home, the energy conservation is only marginally better. Again, that is because of the abundant cheap energy within a country that virtually lacks its own energy sources other than nuclear and trace “green energy” such as wind and tidal.
Eventually South Korea needs to raise its user tariffs on energy. Just when and how is almost certain to be more political than economic in nature. But it has to be done.
To get an in-depth appreciation of this issue, please work through the two longish, below news articles and charts (latter found via hot links).
Gov’t mulls price hike to curb electricity usage
[NEW ANALYSIS] ‘Cheap electricity prices are like holding a bomb that could go off anytime.’
By Lee Sun-min
Korea JoongAng Daily
May 29, 2012
Click here to view article and graphs/tables
Public corporations face operating losses, large debt
By Limb Jae-un
Korea JoongAng Daily
May 29,2012