Market News

 August 12, 2013
South Korea warns of power shortages amid nuclear shut downs

 South Korea has warned of serious power shortages this week amid an expected rise in summer temperatures and as the resources-starved country struggles to keep up with demand after six nuclear plants have gone off-line.

The energy ministry said it may take emergency measures such as rolling power cuts to avoid a repeat of 2011 blackouts which cut electricity to businesses and homes across the country.

Separately, the ministry said some major companies, including Kia Motors Corp and Hyundai Motor Co, had not complied with energy saving regulations such as cutting power consumption during peak hours.

Both automakers refused to comment on the matter.

Of the country's total 23 reactors, six units are currently off line - three for maintenance or expiry of operational approval, and the other three to replace cables supplied with fake certificates.

Oil, gas and coal produce most of South Korea's electricity, but nuclear plants generate more than 30 percent of power.

"If one nuclear reactor stops its operation all of a sudden, we may have to start rolling power blackouts like we did on September 15, 2011," Energy Minister Yoon Sang-jick told a news conference.

Rolling blackouts would initially affect residential areas, minimizing any impact on the country's export-focused businesses.

South Korea's power demand is projected to peak at up to 80,500 megawatts (MW) in the next three days while its power supply capacity is seen at 77,440 MW, the energy ministry said in a statement. With all the possible power-saving and supplying measures, the supply surplus could be raised to 1,800 MW but that would still not be enough, it added.

South Korea has carried out power saving measures in the past such as encouraging offices and households to use less air-conditioning.