The Dawn of the Age of Energy Realism – Where is South Korea’s Energy Strategy Headed?

As of November 21, 2025, a new trend is emerging in the global energy market. While climate change response and carbon neutrality were previously considered absolute values, ‘energy realism,’ which takes economic feasibility into account, is now rapidly gaining traction. Particularly, the recent public statement by Qatar’s Minister of Energy, Saad Sherida Al-Kaabi, at ADIPEC 2025, where he expressed disbelief in the achievability of net-zero emissions, has sparked significant controversy.

Personally, the background for such remarks seems to stem from the clear limitations of practical energy transition. From the perspective of oil-producing countries, the core argument is that with current technology, it is challenging to ensure the stability of large-scale power grids using only intermittent renewable energies like solar and wind. More importantly, there is concern that the enormous costs incurred during the carbon neutrality process will ultimately be passed on to consumers, potentially expanding energy poverty and weakening industrial competitiveness.

Looking at actual data, these concerns are not mere worries. As of 2024, the European Union recorded a historic high of 47% in renewable energy generation. This is 4.7 times higher than South Korea’s 10%. However, the cost is substantial. According to Statista data, as of March 2025, household electricity rates show Ireland at $0.45 per kWh, Italy at $0.43, and Germany, Belgium, and the UK at $0.4, ranking among the most expensive in the world. Denmark also stands at a significantly high level of $0.36.

In contrast, South Korea’s electricity rate is $0.081 per kWh, significantly lower than the United States ($0.18) and Japan ($0.23). Only a few places like China ($0.08), UAE ($0.08), Turkey ($0.07), and Russia ($0.06) have lower rates than South Korea. These figures indicate that Europe’s aggressive transition to renewable energy indeed leads to a tremendous cost burden.

Common Ground Between the Trump Administration and Oil-Producing Countries

Interestingly, U.S. President Trump is advocating a similar logic. Although he differs from oil-producing countries in that he denies the science of climate crisis itself, claiming it to be a ‘climate crisis hoax,’ he shares the goal with oil-producing countries in viewing climate regulations as weakening the competitiveness of U.S. manufacturing and reducing jobs. The perspective that climate regulations like the Paris Agreement are growth inhibitors seems to be spreading.

Amidst this trend, it is even more surprising that major countries, which have actively led climate policies, have not completely abandoned coal power. In Germany, which declared a coal phase-out, the Christian Democratic Union (CDU), a centrist-right party that came to power in the 2025 general election, pledged to build 50 gas and coal-fired power plants as part of its election promises. This appears to reflect realistic concerns about energy security and grid stability.

Global energy statistics reveal an even more complex reality. In the first half of 2025, for the first time, global renewable energy generation surpassed coal generation, but as of 2024, global coal usage reached an all-time high. This means that while the growth rate of coal usage has slowed, the actual usage itself continues to expand.

While the share of non-carbon power sources in global energy consumption is 41%, 7 percentage points ahead of coal power (34%), this includes nuclear power. The share of purely renewable energies like solar and wind remains at about 15%. This explains why major countries like China, the United States, and Germany maintain coal power as a strategic backup to ensure grid stability.

South Korea’s Energy Dilemma

In this international trend, South Korea’s situation is even more complex. Although Environment Minister Kim Sung-hwan recently joined the Powering Past Coal Alliance at COP30 in Brazil, there is still opposition within the domestic energy industry, arguing that coal power is necessary for stable power supply. There seems to be a concern that if South Korea unilaterally declares a coal phase-out, it could diverge from international trends in terms of industrial competitiveness and power stability.

South Korea’s dependency on energy imports reaches 95%, and with an economy based on manufacturing, rising energy costs directly impact industrial competitiveness. In particular, with energy-intensive industries like semiconductors, steel, and chemicals being central to South Korea’s economy, a radical energy transition akin to Europe’s carries significant risks.

In fact, the relatively low electricity rates in South Korea compared to major countries reflect policy considerations to maintain manufacturing competitiveness. If electricity rates were to rise to European levels, the production cost burden on South Korean manufacturers would increase sharply, likely leading to weakened international competitiveness.

Moreover, South Korea is geopolitically surrounded by countries with differing energy policies, such as China, Japan, and Russia, making the establishment of an independent energy strategy even more crucial. China still has a high dependency on coal, Japan lacks social consensus on nuclear policy post-Fukushima, and Russia, as a natural gas exporter, is passive about carbon neutrality.

Personally, I believe it is time for South Korea to establish a mid- to long-term energy transition roadmap through a ‘Korean-style energy pragmatism’ that simultaneously meets climate response, industrial competitiveness, and grid stability. This means not merely increasing the share of renewable energy but optimizing the energy mix, including nuclear, natural gas, renewables, and coal if necessary, to build a stable and economical energy supply system.

Particularly, South Korea’s nuclear technology is world-class, as demonstrated by the successful export of the Barakah nuclear power plant to the UAE, gaining international recognition. South Korea is also in a leading position in the development of SMR (Small Modular Reactors), which could be a realistic alternative for expanding carbon-free energy supply. This is why the construction of Shin Hanul Units 3 and 4 and the commercialization plans for SMR by Korea Hydro & Nuclear Power are gaining attention.

Ultimately, South Korea must find a balance between the global goal of carbon neutrality and energy security and economic feasibility. Rather than blindly following Europe, it seems necessary to develop an independent energy strategy considering South Korea’s unique situation. It will be important to watch how the government and the energy industry coordinate policies moving forward.

This article was written after reading the [Energy Insight] ‘Energy Realism’ on the Rise… South Korea’s Dilemma article, adding personal opinions and analysis.

Disclaimer: This blog is not a news outlet, and the content reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no liability is assumed for investment losses based on this article.