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Current Situation and Prospects of Energy Cooperation between Two Koreas

Current Situation and Prospects of Energy Cooperation between Two Koreas. Kyung Sool Kim Korea Energy Economics Institute Center for Energy Research, Northeast Asia. Contents of Presentation. Very Limited Interactions So Far Inter-Korean Energy Cooperation Projects

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Current Situation and Prospects of Energy Cooperation between Two Koreas

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  1. Current Situation and Prospects of Energy Cooperation between Two Koreas Kyung Sool Kim Korea Energy Economics Institute Center for Energy Research, Northeast Asia

  2. Contents of Presentation Very Limited Interactions So Far Inter-Korean Energy Cooperation Projects Sectoral Agenda for Inter-Korean Energy Cooperation Difficulties and Polices

  3. Very Limited Interactions So Far

  4. Oil Supply to Kumkang • Mountain Tourism Area • ~ 2004: 50b/d • 2005 ~ : 150b/d • Gas Station and • Auxiliary Facilities • Asphalt Supply for Road and • Airstrip Construction • July 2005: Pitch 8,000ton • Jan, 2006: Pitch 8,000ton

  5. Oil Supply for Railroad • Interconnection • 2002. 10 ~ : 20b/d • Storage Tank 3units, • Lubricator 3units • Humanitarian Aids for • Ryong-Cheon Accident • (2004) • Asphalt 2,000ton • Gasoline 167ton • Diesel 167ton

  6. Energy Supply to Gaesung Industrial District • Demonstration District • (15 firms) • 2004. 5 ~ : 220b/d • Storage Tank: • Light oil 400kl, • LPG 30ton • 3 LPG Companies • Electricity: • 15,000kW by • Distribution • Expansion of • Electricity Network • 100,000kW by • Construction of • Transmission • line(154kV) • Under Construction

  7. Energy Supply to Gaesung Industrial District • KOGAS once • examined natural • gas supply to • Gaesung ID • Not fixed yet.

  8. Major Inter-Korean Energy Cooperation Projects • Significant Suggestion • Trilateral Electricity Cooperation • KORUS Proposal

  9. Significant Suggestion • Transmit 2 million kW of electricity • from Yangju substation in South to Pyungyang substation in North • by way of the construction of transmission line

  10. Content & Concept

  11. Significant Suggestion Cost & Effects • Cost Estimation • Effects Estimation

  12. Significant Suggestion Effects • Electricity demand/supply condition will be recovered more • than 1990 level • N. Korea recorded the highest power generation in 1990 • Current electricity supply problem will be totally solved • Could be the turning point of national economic recovery

  13. Trilateral Electricity Cooperation Russia, N. Korea, S. Korea • Russian suggestion for the electricity supply from Bureya hydro power plant to South Korea pass through North Korea: Bureya Plant – Khabarovsk – Vladivostok – Kraskino – Chongjin – S. Korea • 1st Stage : Vladivostok - Chongjin • 2nd Stage : Chongjin – S. Korea • Current status: • Agreement on electricity network interconnection and electricity supply between DPRK and Russia (02.4) • 4th Three party meeting on Northeast Asia electricity network interconnection (05.2): Main argument is on the pre-feasibility study in DPR Korean area • Comprehensive research project by KERI (03~05)

  14. Bureya HPP Khabarovsk CHINA Vladivostok DPRK

  15. Details of 1st stage 500 kV Vladivostok 250km “Russia – DPRK Inter-connections” AC 500 Kv, 50Hz «Vladivostok-Kraskino-Chhonjin» Length ~ 380 km Transmission ~ 600 MVA 1,500~2,500 million kWh/year Construction Costs: 160~180mln USD 500 kV Kraskino 130km Chhonjin 300~500MW Source: ACE Engineering

  16. KORUS Pipeline Proposal • Proposed to import Russian (Sakhalin) natural gas to S. Korea by way of N. Korea • Two different lines are suggested • Suggested as • an post-KEDO • alternative • Pipeline from • Sakhalin to • ROK by way • of Khabarovsk • , Vladivostok • and N. Korea

  17. Sectoral Agenda for Inter-Korean Energy Cooperation • Non-Physical Capacity Building • Energy market system • Coal Sector • Oil Sector • Electricity Sector • Gas Sector • New & Renewable Energy Sector • Other Sector

  18. Energy Cooperation Agenda under Discussion • Cooperation for Non-Physical Capacity Building • Energy experts exchange • Education/Training N. Korean energy experts • Energy statistical system • Energy census and/or Surveys • Cooperation for the introduction of energy market system • Education/Trainingon commercial energy system • Education/Trainingon international energy market • Reform energy laws and regulations • Fostering private energy business firm

  19. Energy Cooperation Agenda under Discussion • Cooperation Agenda in Coal Sector • Cooperation in coal mine modernization projects • Cooperation in the development of new coal mine • Coal technology exchange • Cooperation in the development of foreign coal mine • Cooperation in import of coal from abroad • Cooperation Agenda in Oil Sector • Supply heavy oil to North Korea • Rehabilitation of idle refinery facilities • Refine South crude oil in North refinery • Cooperation in the construction of oil infrastructure • Cooperation in physical distribution of oil • Cooperation in the development of N. Korean oil resource

  20. Energy Cooperation Agenda under Discussion • Cooperation agenda in Electricity Sector • Electricity supply to Gaesung Industrial District • Significant Suggestion to supply 2 mil.kW to DPRK • Cooperation for the interconnection of grids • Cooperation in Northeast Asian grid interconnection • Rehabilitation of power generation facilities in North • Modernization of N. Korean transmission and distribution lines • Cooperation Agenda in Gas Sector • Natural gas Supply to Gaesung Industrial District • Cooperation for the diffusion of LPG in North Korea • Cooperation in the construction of gas infrastructure • Cooperation in Northeast Asian gas pipeline project

  21. Energy Cooperation Agenda under Discussion • Cooperation agenda in NRSE (New & Renewable Sources of Energy) Sector • Cooperation for N. Korean NRSE resources evaluation • NRSE technology cooperation • Cooperation in the development of demonstration projects • Cooperation Agenda in Other Sector • Cooperation in energy efficiency improvement projects • Energy /environment improvement projects

  22. Energy Cooperation between Two Koreas • Difficulties • Policies

  23. Difficulties • Different Perspectives on Inter-Korean Energy • Cooperation

  24. Difficulties • Different Restrictions of Energy Sector

  25. Policies • Principles and Policies

  26. Preparation for the Future Cooperation Current Status • Research & develop various cooperative projects • Government, research institutes, private firms, • organizations • Wide spectrum of cooperation agenda • Almost all of them are not implacable owing to; • Closed characteristics of N. Korean society • Delay of system change to market mechanism • Undulation of South/North Korean relations • Lack of information on N. Korean energy sector Preparation for the Future • Blue print for inter-Korean energy cooperation • Government/private sector • Overall/sectoral • Expand contact and communication • Enhance energy policy capability • Build-up mutual trust and credibility • Guide to modern energy system

  27. THANK YOU VERY MUCH Korea Energy Economics Institute CERNA (Center for Energy Research, Northeast Asia)

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