Soaring prices of spot LNG supply amid the lack of Middle Eastern deliveries have pushed South Korea to rely more on coal-fired power generation in the coming winter, despite its pledge to shift away from fossil fuels.
Like all other Asian importers, South Korea, the world’s third-largest LNG buyer after China and Japan, has been hit by the Middle East crisis and the lack of Qatari LNG supply. Soaring spot LNG prices for supply not needing the Strait of Hormuz have made running gas-fired plants uneconomical compared to coal.
In the winter, South Korea needs to reduce gas consumption and will therefore rely more on coal and nuclear power generation, Climate, Energy and Environment Minister Kim Sungwhan told Bloomberg in an interview published on Friday.
“In the short term, we are in a situation where we must somehow reduce LNG demand,” Kim told Bloomberg.
“Inevitably, we have to reduce gas usage by rapidly expanding renewables while more actively utilizing nuclear and coal power.”
Gas-fired power generation in South Korea and Japan crashed earlier this year as the Middle East crisis began. In South Korea, coal-fired power supply soared by 40% in April, the biggest jump since August 2019, according to market data cited by Reuters.
Coal is also set to play a key role in power supply in the winter as LNG prices at four-year highs are raising electricity prices.
In the short term, energy security this winter trumps the energy transition agenda in South Korea.
The government has recently unveiled plans to invest as much as one quadrillion Korean won, or $747 billion, in renewable energy, EV uptake, and industry decarbonization by 2035 as it looks to address energy security concerns and tightening global carbon regulations.
As of the early-June 2026 spot prices, South Korea’s annual fossil fuel imports for the whole energy sector would hit $133 billion, research by Ember and Global Energy Monitor showed earlier this year. That sum is almost six times the country’s annual debt repayments, three and a half times food imports, and almost three times its defense expenditure.
By Tsvetana Paraskova for Oilprice.com
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