Primary energy demand in 2012 is expected to rise 0.6%6)year-on-year to 273.0 million toe.
Forecasts on stabilization of primary energy demand in 2012 are the result of expectations of lower economic growth in Korea and abroad and international oil prices remaining at high levels.
* Economic growth rate (%): (Year 2010) 6.3 →(Year 2011) 3.6 →(Year 2012) 3.3
Nuclear power and LNG consumption are forecast to indicate relatively high growth as a result of strong electricity demand and the commencement of operation of new nuclear power plants.
- Nuclear power generation is expected to rise slightly with the commencement of
Outlook on Energy Demand
2
[Figure 5] Outlook on economic growth rate and primary energy increase
6) The new energy conversion factor (changed on December 30, 2011) was applied to the energy supply/demand balance starting in 2012. When the previous energy conversion factor is applied, primary energy consumption is forecast to rise 2.1% year-on-year in 2012.
operation of new nuclear power plants (Singori Nuclear Power Plant Unit 2, Sinwolseong Nuclear Power Plant Unit 1) despite the stoppage of operation of Gori Unit 1 in the first half of the year.
* Rate of increase in nuclear power generation: (Year 2010) 0.6% →(Year 2011) 1.1%
→(Year 2012) 4.0%
* Rate of increase in LNG demand: (Year 2010) 26.8% →(Year 2011) 8.3% →(Year 2012) 4.2%
Energy demand for raw material use (non-energy, coking coal) will likely fall by 0.6%
(rise by 2.1% based on the previous energy conversion factor), reflecting the economic slowdown.
- Energy for raw material use is expected to account for 25% of primary energy demand in 2012.
Forecasts on key energy indicators
Energy intensity is expected to improve 2.6% from 0.251 toe/million won in 2011 to 0.244 toe/million in 2012. There are substantial energy intensity improvement effects with the change in the energy conversion factor.7)
- Energy intensity deteriorated in 2009 and 20108), but began to rebound in 2011 and is forecast to continue improving.
Per-capita energy consumption is forecast to rise from 5.45 toe in 2011 to 5.46 toe in 2012.
7) When the previous energy conversion factor is applied, energy intensity is expected to improve 1.2% in 2012 to stand at 0.248.
8) It deteriorated in 2009 because of an increase in energy transformation loss, triggered by a sharp rise in electricity consumption, and the commencement of operation of new facilities in energy-intensive industries. It worsened in 2010 mainly because of a sharp rise in energy consumption for industrial use and an increase in energy consumption for cooling and heating purposes, a result of unusual weather in the summer and winter.
Forecasts for energy demand by source
Coal demand is expected to rise 0.5% in 2012.
- Bituminous coal demand is forecast to rise 0.9% year-on-year. Demand for power generation is expected to slightly increase (0.9%) as a result of a rise in the utilization rate, triggered by the complete absence of facility expansion. Coking coal demand is forecast to rise only 1.6% as a result of the economic slowdown.
- Anthracite demand is expected to record a year-on-year decrease of 4.5% owing to the continued decline in demand for power generation and the peaking of demand for industrial use, which had been rising but is now going down (-4.4%).
Oil demand is forecast to continue gradual growth in 2012 as well, indicating a year-on- year rise of 1.5%.
- Oil demand for transport is forecast to increase 2.1% owing to a steady rise in automobile sales and an increase in international air transport, despite the persistence of high oil prices.
- Oil demand for industrial use is forecast to rise only 1.0% from the previous year owing to a drop in demand for fuel and a much slower rise in naphtha consumption (7.0% in 2011 →2.4% in 2012), attributable to a slower rise in the petroleum refining and petrochemical sector.
[Figure 6] Outlook on energy intensity and per-capita energy consumption
- Naphtha accounts for 45% of total oil demand, and it is forecast to lead the increase in overall oil demand. Consumption, though rising at a slower rate, is still expected to rise more rapidly than consumption of other petroleum products.
LNG demand is forecast to rise 4.2%.
- LNG demand for power generation, which accounts for 45% of total consumption of LNG, is expected to rise 4.7% and lead the rise in overall LNG demand.
- LNG demand for power generation is expected to indicate sound growth due to a sharp increase in electricity demand and a shortage in base-load power generation facilities, despite expansion of nuclear power plant capacity of 2 million kW in 2012.
- Town gas is forecast to record an increase rate of 3.0%, with town gas for industrial use leading the overall rise in demand.
- Town gas for industrial use will rise 4.5% and lead the increase in demand in 2012. But this is a sharp deceleration from the 11.1% increase in 2011. Demand in the residential/commercial/public sector is expected to be about the same as during last year.
Many factors are serving to increase demand for electricity, such as the low charges and use of more electric-powered equipment. However, demand is expected to increase at a slower rate of around 3.5% as a result of the slowdown in industrial production and the government’s strong electricity demand management policies.
- Electricity demand for industrial use is expected to rise 4.9% year-on-year. This would be a substantial lower rate of increase than in 2011, but electricity demand for industrial use will continue to lead the rise in overall electricity demand.
- The rate of increase in electricity demand for residential/commercial use is expected to rise slightly in 2012 owing to low consumption in 2011 stemming from low temperatures in the summer and high temperatures in the winter.
Nuclear power generation is forecast to rise 4.0% as new facilities come on-line.
- Singori Nuclear Power Plant Unit 2 (1 million kW) and Sinwolseong Nuclear Power Plant Unit 1 (1 million kW) are expected to commence commercial operations in June.
This translates into an expansion in facility capacity of 10.7% from the end of last year.
- The cessation of operations of Gori Unit 1 (590 thousand kW) for a safety test and the
end of the design life (November) of Wolseong Unit 1 (680 thousand kW) will partially offset the increases in nuclear power generation elsewhere.
Outlook on share of consumption by each energy source
Oil’s share of consumption dropped to below 50% in 2002 and has continued to go down. It is forecast at 38.1% for 2012.
The share taken up by coal consumption increased from 23.0% in 2001 to 28.9% in 2011 as a result of a steady rise in coking coal consumption for industrial use and coal consumption for power generation.
- The share accounted for by coal will likely decrease for the first time in the 2000s in 2012 since there will be no expansion of coal-based power generation facilities and demand for industrial use will likely increase more slowly.
The share accounted for by LNG has been rising sharply since 2000. This is attributable to a sharp rise in LNG demand for power generation resulting from a rapid increase in electricity demand and a lack of expansion of base-load power generation facilities.
The share of primary energy occupied by nuclear power peaked at 16.1% in 2005 and [Figure 7] Share accounted for by each energy source
then declined through 2011 as no facilities were expanded or built. The share is expected to rise to 12.1% in 2012 as a result of a substantial rise in facility capacity.
Final energy demand is forecast to be stagnant in 2012, according to the new energy conversion factor.9)
Consumption is forecast to rise at a slower rate in 2012 as a result of the slowdown in economic growth, triggered by the global economic downturn, and the high oil prices.
Energy demand in the industrial sector is expected to fall 0.3% (it is forecast to rise 1.8%
when the previous energy conversion factor is applied) due to reduced consumption of petroleum products for fuel and anthracite, etc., although consumption of electricity, naphtha, town gas, etc. is expected to rise.
- Demand of the industrial sector is expected to rise at a slower rate owing to a slower rise in demand for non-energy oil (naphtha, etc.) and electricity, etc., which have recently led the rise in overall energy demand.
Energy demand in the residential, commercial, and public sector is expected to rise only slightly - less than 1% - unless unusual weather occurs.
Energy consumption in the transport sector is expected to change little from last year due to the economic slowdown and the persistence of the high oil prices.
Final energy consumption structure by sector
The share of energy consumption taken up by the industrial sector remained between 55 and 56% until 2005. It began to rise afterwards and will likely reach 60.5% in 2012 (60.7% when the previous energy conversion factor is applied).
- The increase in the share taken up by the industrial sector is a result of steady growth of energy-intensive industries including the steel and petrochemical industries and very strong growth of the fabricated metal industry, which is also very energy-intensive.
9) When the previous energy conversion factor is applied, the rate of increase in final energy demand will likely be 1.7% (1.4% when excluding energy demand for raw material use). The forecast for the industrial, transport, and residential/commercial/public sectors is 1.8%, 2.2%, and 0.8%, respectively.
The transport sector accounted for 21.0% of consumption in 2006, but its share decreased steadily afterwards. It fell to 18.4% in 2011 but is forecast to slightly rise to 18.5% in 2012.
- The drop in the share of consumption of the transport sector is a result of a substantial drop in the rate of increase in petroleum product consumption for transport in response to the sustained rise in international oil prices since 2003.
The share of consumption occupied by the residential/commercial/public sector, where most energy is consumed for heating and cooling purposes, tends to vary with temperature fluctuations in the summer and winter.
- The percentage of consumption accounted for by the residential/commercial/public sector indicated a steady downward trend in tandem with strong energy consumption by the industrial sector since 2005. This trend is expected to continue during the forecast period.
[Figure 8] Share of final energy demand occupied by each sector
Notes: 1) The figures for 2012 were calculated according to the new energy conversion factor (changed on December 30, 2011). When the previous energy conversion factor is applied, primary energy demand indicates a year- on-year increase of 2.1% (2.0% when excluding energy demand for raw material use).
2) Figures in parentheses are year-on-year growth rates (%). p indicates that the figures are preliminary; e indicates that the figures are forecasts.
Category 2011p 2012e
1/4 2/4 3/4 4/4 Annual 1/4 1st half 2nd half Annual
<Table 1> Primary energy consumption trends and outlook
30.4 28.8 32.2 33.4 124.8 31.1 60.1 65.3 125.4
(-0.8) (3.1) (6.4) (9.5) (4.6) (2.3) (1.5) (-0.5) (0.5)
24.2 22.3 25.8 26.8 99.1 24.8 47.2 52.1 99.3
(3.7) (2.6) (5.6) (10.2) (5.6) (2.6) (1.5) (-1.0) (0.2)
206.7 183.2 201.1 210.3 801.3 209.1 398.1 415.4 813.5
(4.0) (-5.3) (4.9) (0.0) (0.9) (1.2) (2.1) (1.0) (1.5)
110.3 90.8 101.6 108.8 411.4 108.0 202.9 211.3 414.2
(-0.5) (-11.9) (0.2) (-6.5) (-4.7) (-2.1) (0.9) (0.4) (0.7)
12.2 7.3 6.3 10.0 35.8 12.6 20.3 17.0 37.3
(11.3) (9.1) (10.3) (3.0) (8.3) (3.1) (4.0) (4.4) (4.2)
1.6 1.9 3.4 1.2 8.0 1.7 3.9 4.4 8.3
(27.2) (21.4) (44.5) (-14.3) (23.3) (9.6) (13.2) (-3.8) (3.5)
37.5 38.6 38.2 35.9 150.2 37.7 75.1 81.1 156.2
(4.0) (5.8) (1.7) (-6.8) (1.1) (0.6) (-1.3) (9.5) (4.0)
1.5 1.5 1.5 1.8 6.4 1.5 3.2 3.6 6.8
(2.9) (0.8) (-3.9) (19.9) (4.9) (0.0) (4.9) (7.7) (6.3)
72.4 62.1 65.3 71.5 271.4 72.6 135.2 137.9 273.0
(4.2) (0.9) (5.7) (2.6) (3.4) (0.3) (0.5) (0.7) (0.6)
55.6 45.6 48.0 53.7 202.9 55.6 101.8 103.1 204.9
(4.8) (0.1) (4.2) (1.0) (2.6) (0.1) (0.6) (1.4) (1.0)
Coal (Million ton) -Excluding coking coal
Oil (Million bbl) -Excluding non-energy
LNG (Million ton)
Hydro (TWh) Nuclear power
(TWh) Other (Million TOE) Primary energy (Million TOE) Primary energy -Excluding
for raw materials
Notes: 1) The figures for 2012 were calculated according to the new energy conversion factor (changed on December 30, 2011). When the previous energy conversion factor is applied, final energy demand indicates a year-on- year increase of 1.7%.
2) p indicates that the figures are preliminary; figures in parentheses are year-on-year growth rates (%)
Industry 2011p 2012e
1/4 2/4 3/4 4/4 Annual 1/4 1st half 2nd half Annual
<Table 2> Final energy consumption trends and outlook
30.0 29.3 30.3 31.8 121.5 30.1 59.3 61.8 121.1
(3.4) (2.6) (9.3) (6.6) (5.5) (0.3) (0.0) (-0.7) (-0.3)
13.2 12.7 13.0 14.1 53.0 13.1 25.9 27.0 53.0
(5.4) (2.1) (8.1) (5.1) (5.2) (-0.5) (0.1) (-0.1) (0.0)
8.8 8.7 9.8 9.5 36.8 8.9 17.7 19.2 36.9
(2.4) (-5.8) (2.6) (-1.1) (-0.5) (1.1) (1.2) (-0.1) (0.5)
15.3 8.4 7.2 11.0 41.9 14.9 23.4 18.6 42.1
(5.1) (-2.5) (2.2) (-4.2) (0.5) (-2.6) (-1.0) (2.1) (0.4)
54.1 46.4 47.3 52.4 200.2 53.9 100.5 99.6 200.1
(3.7) (0.0) (6.7) (2.7) (3.3) (-0.4) (0.0) (-0.1) (0.0)
37.3 29.9 29.9 34.6 131.7 36.9 67.1 64.8 132.0
(4.6) (-1.6) (4.8) (0.3) (2.0) (-1.0) (0.0) (0.5) (0.2)
8.1 4.5 3.0 5.6 21.2 8.3 12.9 9.0 21.9
(6.2) (5.5) (14.8) (2.7) (6.2) (2.3) (2.0) (4.5) (3.0)
196.4 179.8 197.5 205.3 778.9 199.2 382.3 404.2 786.5
(4.1) -(4.3) (5.8) (0.5) (1.5) (1.4) (1.6) (0.4) (1.0)
100.1 87.4 98.1 103.8 389.3 98.2 187.2 200.1 387.3
(-0.7) (-10.2) (1.7) (-5.9) (-3.8) (-1.9) (-0.2) (-0.9) (-0.5)
121.4 109.0 112.5 112.2 455.1 124.7 237.1 234.6 471.7
(7.9) (5.1) (3.2) (3.0) (4.8) (2.7) (2.9) (4.4) (3.6)
10.6 10.7 10.7 11.8 43.9 10.5 21.3 22.4 43.8
(-5.5) (3.0) (13.0) (10.6) (4.9) (-1.8) (0.0) (-0.4) (-0.2)
4.4 4.2 4.3 5.2 18.2 4.2 8.4 9.3 17.7
(12.5) (-0.1) (17.9) (15.7) (11.4) (-5.8) (-2.1) (-3.2) (-2.7)
2,175 1,623 1,427 2,125 7,351 2,170 3,940 3,802 7,741
(2.9) (4.3) (1.3) (7.1) (4.1) (-0.2) (3.7) (7.0) (5.3)
Industry (Million TOE) -Excluding for raw materials Transport (Million TOE) Residential/
commercial/
Public (Million TOE)
Total (Million TOE)
Total -Excluding for raw materials Town gas (Billion m3)
Oil (Million bbl) -Non-energy
oil excluded Electricity (TWh)
Coal (Million ton) -Excluding coking coal Thermal and
other (Thousand TOE)
Notes: 1) The figures in parentheses were calculated according to the previous energy conversion factor. p indicates that the figures are preliminary; e indicates that the figures are forecasts.
2) A change to estimated population material (Statistics Korea, kosis) has resulted in changes in the per-capita consumption records of 2006 and onwards.
Category 2005 2006 2007 2008 2009 2010 2011p 2012e
Economic growth rate (%) 4.0 5.2 5.1 2.3 0.3 6.3 3.6 3.3
Increase in primary energy
3.8 2.1 1.3 1.8 1.1 7.9 3.4 0.6
consumption (%) (2.1)
Energy intensity
0.264 0.256 0.247 0.246 0.248 0.252 0.251 0.244
(TOE/Million won) (0.248)
Per-capita
4.75 4.82 4.87 4.92 4.95 5.31 5.45 5.46
consumption (TOE) (5.54)
<Table 3> Major indexes related to energy consumption
