The Korean government’s energy policy,
problems of climate finance and public alternatives
17 May 2023, Johannesburg
SungHee Oh
Director of International Affairs
Korean Public Service and Transport Workers’ Union
Power industry privatisation in Korea
Continuation of energy privatisation and liberalisation policies
Private capital investor
Public power generation company
Long-term fixed contract
Special Purpose Company
(SPC)
Investing in stocks
Project company
Operating company
Loan/
Financial investment
Public power generation
company
KEPCO
sales
sales
Foreign capital’s entry into offshore wind power
<Structure of private capital investment project in offshore wind power generation>
Investing in stocks
Privately-led renewable energy
Power industry privatisation in Korea
| Korea Gas Corporation�(public) | Direct imports from big private companies | ||
2013 | 39,326 | 96.5% | 1,414 | 3.5% |
2014 | 36,332 | 96.4% | 1,368 | 3.6% |
2015 | 31,410 | 94.4% | 1,878 | 5.6% |
2016 | 31,846 | 93.7% | 2,155 | 6.3% |
2017 | 33,063 | 87.7% | 4,645 | 12.3% |
2018 | 38,170 | 86.1% | 6,173 | 13.9% |
2019 | 33,734 | 82.2% | 7,280 | 17.8% |
2020 | 30,798 | 77.6% | 9,202 | 22.4% |
Unit: 1,000 tons
| SK affiliates | GS affiliates | POSCO affiliates | S-Oil | Korea Midland Power (Public) | Total |
Volume | 314 | 265 | 177 | 91 | 82 | 920 |
Share | 34.1% | 27.8% | 19.3% | 9.9% | 8.9% | 100% |
Unit: 10,000 tons
Increase in the volume of direct imports by private companies
Power industry privatisation in Korea
Share of IPPs in generation capacity
Public
Private
35.2%
(2.5times )
Power industry privatisation in Korea
Power industry privatisation in Korea
Further privatisation of the power industry
KEPCO’s overseas projects
KEPCO’s overseas projects
The rise of the market fundamentalism based climate organisations
The National Pension Fund’s declaration to limit investing in coal projects
Separation generation sector from KEPCO
Consolidation of divided public power companies
Trade union response
IPPs account for
35% of generation
Privately-led
Renewable energy
Democratic
governance
Abolition of
direct
Import of
natural gas
Municipalisation of IPPs
Sharing of profits from private projects
Trade union response
Green Climate Fund
Green Climate Fund
1) Funding concentrated through International Access Entities
-Entities, not developing countries’ governments(or regions), drive GCF projects. Violation of the GCF principle for country ownership.
Green Climate Fund
2) Is the GCF being properly utilised for adaptation projects?
-Insufficient support for SIDS(Small Island Developing States) and LDCs(Least Developed Countries)
- More funding allocated to mitigation than adaptation
Green Climate Fund
3) Inequalities in funding and allocation
-Other means such as loans and equity are being used more than aid
-The GCF also highlights the need to attract private capital, touting the benefits of blended finance
Green Climate Fund
Public goods approach to International Climate Finance
1)International climate finance and the Green Climate Fund should embrace universal quality public service provision as a key principle and introduce safeguards against privatisation or corporatisation of essential services;
2)Developed countries should actively embrace historical justice and provide their fair share of international climate finance to meet the needs of developing countries estimated at $ 4-6 trillion per year. These commitments must be new contributions, additional to Official Development Assistance, public, grant based, and predictable for use in relation to adaptation, mitigation and loss and damage caused by the climate crisis;
3)The Green Climate Fund needs to strengthen its position on climate finance as a public good and abandon its continued emphasis on the role of private capital, which cannot deliver the services communities need;
4)The Green Climate Fund must engage public sector workers and service users as key parties to review the impact of climate finance projects in their jurisdictions and inform future strategy;
5)The global tax system should be reformed to ensure that multinational corporations and the super-rich pay their fair share of taxes. This can provide important revenue to fund climate finance as a public good.
The Public is Green