South Korea, Asia's third- largest crude oil buyer, plans to spend 3 trillion won ($2.7 billion) expanding the use of alternative energy by 2012 to counter high oil prices and reduce greenhouse-gas emissions.
The government will focus on nine areas including solar, wind, fuel cells, carbon capture and storage, and gas-fired power plants, the Ministry of Knowledge Economy said in a statement today.
South Korea, which imports almost all of its oil, wants to cut reliance on fossil fuels and diversify energy sources as record fuel prices spur the fastest inflation in almost 10 years. Benchmark crude oil prices in New York, which have risen 32 percent from a year earlier, are down 30 percent from an all- time high of $147.27 a barrel reached on July 11 on concern global demand may ease.
“The investment will increase the output of clean energy to $17 billion by 2012 from the current $1.8 billion,'' the ministry said.
Under the plan, solar-power generating capacity will rise 10-fold to 400 megawatts by 2012 and the supply of wind power will climb to 1,145 megawatts from 192 megawatts. The increased supply will make renewable energy account for 3 percent of total power generation in five years.
Electricity generation costs from solar power will fall to 150 won per kilowatt from the current 711 won, according to the ministry.
Low Carbon
The country will invest 340 billion won in hydrogen fuel cells to replace the use of oil in homes and 220 billion won in carbon capture and storage technology, in which carbon dioxide is trapped for underground storage.
The detailed plan came after President Lee Myung Bak said on Aug. 15 that his government will seek “low carbon, green growth,'' referring to sustainable energy use to help reduce greenhouse gas emission and environmental pollution. South Korea is the world's 10th-biggest emitter of greenhouse gases.
Chief executives of South Korean energy companies also reported their investment plans to President Lee today, according to the government statement.
Hyundai Motor Co., South Korea's largest automaker, and its affiliate Kia Motors Corp. plan to invest 2.4 trillion won to produce hybrid cars as demand for fuel-efficient vehicles grows.
DC Chemical Co., a maker of solar-power components, said it will spend about 2.25 trillion won by 2010 becoming the world's largest polysilicon producer. Doosan Heavy Industries & Construction Co., the country's largest power-equipment maker, and No. 2 oil refiner GS Caltex Corp. plan to invest 1 trillion won and 1.2 trillion won each in alternative energy.
