The new BMI South Korea Power Report forecasts that the country will account for 4.86% of AsiaPacific regional power generation by 2013, with a theoretical generation surplus that should avoid theneed for a net import requirement. BMI’s Asia Pacific power generation assumption for 2008 is 7,116terawatt hours (TWh), representing an increase of 3.2% over the previous year. We are forecasting anincrease in regional generation to 9,149TWh by 2013, representing a rise of 28.6%.
Thermal power generation in 2008 totalled an estimated 5,590TWh, accounting for 78.6% of the totalelectricity supplied in the Asia Pacific region. Our forecast for 2013 is 7,046TWh, implying 26.0%growth that reduces the market share of thermal generation to 77.0%. This is thanks largely toenvironmental concerns promoting renewable sources, hydro-electricity and nuclear generation. SouthKorea’s thermal generation in 2008 was 308TWh, or 5.51% of the regional total. By 2013, it is expectedto account for 4.50% of thermal generation.
For South Korea, oil is the dominant fuel, accounting for 43.0% of 2008 of primary energy demand(PED), followed by coal at 27.5%, nuclear at 14.2% and gas with a 14.9% share of PED. Regional energydemand is forecast to reach 4,862mn tonnes of oil equivalent (toe) by 2013, representing 25.1% growthfrom the 2008 level. South Korea’s 2008 market share of 6.18% is set to fall to 5.01% by 2013. SouthKorea’s 151TWh of nuclear demand in 2008 is forecast to tumble in 2009 thanks to capacity reductions,rebounding to 120TWh in 2013, with its share of the Asia Pacific nuclear market falling from 28.5% to18.4% over the period.
South Korea is a lowly 12th, behind Pakistan, in BMI’s enlarged and updated Power BusinessEnvironment rating, aided by the considerable size of the market, established competitive landscape andreasonable country risk profile but hampered by poor growth prospects. The country is just one pointahead of Sri Lanka, but remains comfortably clear of Singapore.
BMI is now forecasting that South Korea’s real GDP growth will average 2.32% per annum between2009 and 2013, with a decline of 1.90% predicted in 2009. Population is expected to expand from 48.6mnto 49.0mn over the period, with GDP per capita and electricity consumption per capita forecast toincrease by 77% and 6% respectively. The country’s power consumption is expected to increase from anestimated 378TWh in 2008 to 403TWh by the end of the forecast period, with surplus generation of anestimated 85TWh in 2008 easing to a potential 42TWh during the forecast period, assuming just 0.3%average annual growth in electricity generation.
Between 2008 and 2018, we are forecasting an increase in Korean electricity generation of 16.7%, whichis near the bottom of the range for the Asia Pacific region. This equates to 21.4% in the 2013-2018period, compared with a decline of 3.9% in 2008-2013. PED growth is set to increase from 1.5% in 2008-2013 to 5.6%, representing 7.2% for the entire forecast period. Nuclear generation is expected to rise by19% between 2008 and 2018, with hydro generation up 267% over the same period. Thermal powergeneration is forecast to rise by 12% between 2008 and 2018. More details of the long-term BMI powerforecasts can be found later in this report.
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