South Korea Aims to Decrease Reliance on Fossil Fuels with Coal Gasification

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Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--Though coal will continue to be a heavy weight energy source in South Korea's power generation industry, not all coal projects will involve directly burning coal. According to Industrial Info, coal projects account for approximately 34% of South Korea's power database, while gas projects account for less than 20%. Despite coal's grip on the industry, coal-to-gas projects are gaining momentum.

South Korea is on the edge of a major development boom in the power generation industry that aims to decrease the country's reliance on imported fossil fuels. With a lack of natural reserves, South Korea is the world's tenth largest energy importer and the eighth largest energy consumer. It is the second largest importer of both liquefied natural gas and coal.

Despite the steady hold of coal, the number of grassroot coal-fired power plants may decrease, and usher in coal integrated gasification combined-cycle (IGCC) and syngas facilities. Coal gasification in expected to gain ground as synthetic natural gas, or syngas, takes its first steps into South Korea's power generation industry. Syngas is produced by steam reforming various sources including natural gas, waste-to-energy gasification or coal gasification. Industrial Info is currently tracking two coal gasification projects in South Korea, with one designated as an IGCC power station and the other as a syngas production facility. Korea Western Power Company, a spin-off of Korea Electric Power Corporation (NYSE:KEP) (KEPCO) (Seoul), plans to begin construction on South Korea's first IGCC project by the end of the year in South Chungcheong province.

A subsidiary of SK Holdings Company Limited (SEO:003600) (Seoul), SK Energy Company Limited, on the other hand, is currently developing a syngas production facility aimed at replacing $20 billion worth of liquefied natural gas. The project, designed to utilize coal gasification, was originally scheduled to undergo construction at the end of last year, however the project was delayed. SK now expects to begin work later next year.

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