SEOUL, Oct. 16 (Korea Bizwire) — Import prices for coal are on a steep rise, according to industry data released Tuesday, increasing the cost of coal-fired power generation — a major source of energy in South Korea.
Statistics from the power industry and the Korea Coal Association put the price of imported coal at US$110.9 per ton as of August, an increase of 8.1 percent from the whole of last year. The last time the price went above $110 was in 2012.
The price of coal from Australia, which accounts of one third of the country’s imports of the product, rose to $130 per ton in the January-August months this year, nearly double the $78.3 for 2016.
Coal-based energy production in South Korea last year was 238,919 gigawatt hours (GWh), or 43 percent of all power generated here.
The soaring prices are putting the Korea Electric Power Corp. (KEPCO) at risk, as the state power company is already deep in deficit. For consumers, this could mean a hike in electricity costs down the line.
The price surge, due primarily to declining supply from mine closures, has also pushed up the cost of coal-fired power production. The average cost stayed between 30 won ($0.02) and 40 won per kilowatt hour from 2010 to 2016. Last year, it shot up to 47.63 won, and in October, it hit 53.55 won.
The trading price of coal may well pass 50 won for the first time since 2001 to set a new record this year, according to industry watchers.
“The increase in international coal prices will lead to import price increases at home, and this will cause an increase in coal-fired power generation, which raises concerns of further deficit for KEPCO,” an industry official said. “Considering that KEPCO has raised electricity prices when it was burdened with deficits in the past, we could see a repeat of that controversy.”