popular articles

South Korea: 9.7% Industrial Electricity Rate Hike to Reduce Kepco’s Losses

South Korea will raise industrial electricity rates by 9.7% starting October 24, 2024. This measure, which does not affect households, aims to reduce Kepco's growing losses.

Please share:

South Korea has announced an increase in electricity rates for industrial use, with an average hike of 9.7% starting October 24, 2024. This decision, made by the Ministry of Trade, Industry, and Energy (MOTIE), will not impact households, whose bills remain frozen to account for inflationary pressures. This tariff hike is the first since November 2023.

A targeted increase for energy-intensive companies

The rate hike aims to reduce the losses of Korea Electric Power Corporation (Kepco), the national electricity company, which has accumulated significant losses in recent years. Kepco incurred a combined loss of 43 trillion won (31.2 billion USD) between 2021 and 2023, despite strong industrial demand. Major consumers, such as Samsung Electronics, SK Hynix, and POSCO, are affected by this measure.

New tariffs for large companies

The rate for large businesses will rise by 10.2%, reaching 182.7 won/kWh (0.13 USD/kWh), compared to the previous 165.8 won. Small and medium-sized businesses will see a 5.2% increase, bringing their rate to 173.3 won/kWh. According to the ministry, approximately 1.7% of the country’s consumers, representing over 53% of total electricity demand, will be affected by the hike.

Measures to ease the burden on households

Domestic rates remain unchanged, a decision that reflects the government’s intention to protect households and small businesses from inflation. The rate freeze has been maintained due to concerns over citizens’ purchasing power, already impacted by a slowing economy and extreme weather conditions.

Kepco and economic challenges

This rate hike comes as Kepco, burdened by high import costs of liquefied natural gas (LNG) and coal during the pandemic, struggles to improve its financial situation. The company must now adjust its rates to cover losses and finance necessary investments in energy infrastructure. As of June, Kepco’s debt stood at 202.9 trillion won, an increase of 440 billion won since the end of 2023.

Decreasing LNG import costs

Additionally, LNG import costs have been declining since late 2022 due to lower crude oil and LNG spot prices. In September, South Korean LNG importers, including Korea Gas Corporation, paid an average of 11.8 USD per million BTU, compared to 13.05 USD the previous year. To support reduced electricity production costs, the government extended the consumption tax cuts on LNG and coal, as well as the import tariff exemption on LNG until the end of 2024.

Register free of charge for uninterrupted access.

Publicite

Recently published in

The new American plan aims for a 66% reduction in emissions by 2035, focusing on local policies and investments in clean energy, with significant implications for markets and regulation.
The Inter-American Court of Human Rights has condemned Colombia for violating U'wa rights by approving seven energy projects impacting 370 km of their protected ancestral lands.
The Inter-American Court of Human Rights has condemned Colombia for violating U'wa rights by approving seven energy projects impacting 370 km of their protected ancestral lands.
Green electricity outages in Germany jeopardize Olaf Scholz’s energy policy. Amid internal criticism and European tensions, the German model is under scrutiny ahead of the legislative elections.
Green electricity outages in Germany jeopardize Olaf Scholz’s energy policy. Amid internal criticism and European tensions, the German model is under scrutiny ahead of the legislative elections.
Spanish lawmakers rejected the continuation of an exceptional tax on energy companies, highlighting significant parliamentary disagreement and raising concerns about the future of investments tied to the country's energy transition.
Spanish lawmakers rejected the continuation of an exceptional tax on energy companies, highlighting significant parliamentary disagreement and raising concerns about the future of investments tied to the country's energy transition.
Starting July 2025, a European label will allow passengers to compare CO2 emissions from flights, aiming to promote less polluting options.
The UK electricity grid operator, National Grid, announces an ambitious £35 billion plan to double electricity transmission capacity by 2031, in alignment with the government's environmental goals.
The UK electricity grid operator, National Grid, announces an ambitious £35 billion plan to double electricity transmission capacity by 2031, in alignment with the government's environmental goals.
Nigeria approves Shell's $2.4 billion sale of 30% onshore assets
Nigeria approves Shell's $2.4 billion sale of 30% onshore assets
The Department of Energy grants a conditional $15 billion loan to PG&E to modernize California's infrastructure. This project is part of a larger effort to transform regional energy policy.
The Department of Energy grants a conditional $15 billion loan to PG&E to modernize California's infrastructure. This project is part of a larger effort to transform regional energy policy.
Germany’s energy policy, marked by the nuclear phase-out, has driven electricity prices up in Sweden, affecting households and businesses. Stockholm accuses Berlin of neglecting regional impacts and suspends a key interconnection project.
A project supported by the UNDP and the European Union aims to reduce energy losses and modernize Kazakhstan's electric infrastructure, the largest greenhouse gas emitter in Central Asia.
A project supported by the UNDP and the European Union aims to reduce energy losses and modernize Kazakhstan's electric infrastructure, the largest greenhouse gas emitter in Central Asia.
The Court of Audit reveals €200 billion in investment needs to modernize French electrical grids by 2040, urging a balance between shareholder and consumer financial efforts.
The Court of Audit reveals €200 billion in investment needs to modernize French electrical grids by 2040, urging a balance between shareholder and consumer financial efforts.
Donald Trump's proposal to impose a 25% tariff on all imports from Canada and Mexico risks disrupting supply chains and increasing costs for American businesses and consumers.
Donald Trump's proposal to impose a 25% tariff on all imports from Canada and Mexico risks disrupting supply chains and increasing costs for American businesses and consumers.
Reforms aimed at accelerating energy permits have been excluded from the U.S. budget bill, postponing discussions to a Republican-led Congress that plans more ambitious changes.
The U.S. Supreme Court reviews the fuel industry’s challenge against California’s exclusive right to impose electric vehicle sales targets, a key issue for national emission standards.
The U.S. Supreme Court reviews the fuel industry’s challenge against California’s exclusive right to impose electric vehicle sales targets, a key issue for national emission standards.
Japan plans to reduce its reliance on thermal energy to 30%-40% by fiscal year 2040-2041 while significantly increasing renewable energy, according to a draft Strategic Energy Plan.
Japan plans to reduce its reliance on thermal energy to 30%-40% by fiscal year 2040-2041 while significantly increasing renewable energy, according to a draft Strategic Energy Plan.
In response to climate pressures, the Biden administration proposes limiting public support for oil and gas projects abroad. An initiative that could redefine global energy policy.
In response to climate pressures, the Biden administration proposes limiting public support for oil and gas projects abroad. An initiative that could redefine global energy policy.
Niger has received a 20 MW diesel power plant as a strategic donation from Morocco. This project aims to strengthen local production in a context marked by high dependency on Nigeria for energy supply.
The Zawiya refinery, essential for fuel supply in Libya, has suspended its activities after armed clashes caused significant fires and sparked a local crisis.
The Zawiya refinery, essential for fuel supply in Libya, has suspended its activities after armed clashes caused significant fires and sparked a local crisis.
Despite corruption charges against Gautam Adani, CEO of the eponymous conglomerate, Sri Lanka confirms the continuation of the strategic Colombo container terminal project, vital for its struggling economy.
Despite corruption charges against Gautam Adani, CEO of the eponymous conglomerate, Sri Lanka confirms the continuation of the strategic Colombo container terminal project, vital for its struggling economy.
Faced with the threat of Russian gas cuts, Moldova is enacting a 60-day state of emergency to safeguard its energy security and prevent a humanitarian crisis during one of the most critical winters for its energy independence.
Faced with the threat of Russian gas cuts, Moldova is enacting a 60-day state of emergency to safeguard its energy security and prevent a humanitarian crisis during one of the most critical winters for its energy independence.
Utah Governor Spencer Cox proposes an ambitious budget to double energy production within ten years, focusing on nuclear and geothermal energy, contrasting with federal priorities on solar energy.
Energy prices in Europe far exceed those in the United States and China, putting the manufacturing industry at a disadvantage. An urgent review of energy and industrial policies is needed to safeguard European competitiveness.
Energy prices in Europe far exceed those in the United States and China, putting the manufacturing industry at a disadvantage. An urgent review of energy and industrial policies is needed to safeguard European competitiveness.
SSE Transmission submits an ambitious plan to Ofgem, aiming for £22 billion in investments to support energy transition, create thousands of jobs, and strengthen Scotland's electricity infrastructure.
SSE Transmission submits an ambitious plan to Ofgem, aiming for £22 billion in investments to support energy transition, create thousands of jobs, and strengthen Scotland's electricity infrastructure.
The Grand Ethiopian Renaissance Dam offers hope for Ethiopia's energy needs and challenges for Egypt and Sudan's water security. Collaborative management is crucial to prevent crises in the Nile Basin.
The Grand Ethiopian Renaissance Dam offers hope for Ethiopia's energy needs and challenges for Egypt and Sudan's water security. Collaborative management is crucial to prevent crises in the Nile Basin.

Advertising