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The Demand for Wood Pellets for Electricity will be 2.88 Million Tons in South Korea by 2020

The Demand for Wood Pellets for Electricity will be 2.88 Million Tons in South Korea by 2020

South Korea is dependant for 97% of the energy it consumes domestically on imports of petroleum, natural gas, and coal from overseas. The percentage of total energy consumption accounted for by renewable energies is only a mere 2% (in 2012). In order to cut down on emissions of CO2 and reduce the country’s excessive dependence on other countries for fossil fuels, the government has set forth a policy of boosting its percentage of renewable energies to 6.1% by 2020 and then to 11.5% by 2030.

In addition, the government has decided to introduce a Renewable Portfolio Standard (RPS) system that mandates that electric power providers to use a certain percentage of generated output from renewable energies. This percentage will be 2% in 2012, but will be expanded to 10% by 2020.

One of the renewable energy sources that the country is putting most of its efforts into is wood pellets. Given that 63% of its national territory is forests South Korea has an abundance of woody biomass. As such, the government indicated its plan to build pellet manufacturing plants in 11 locations within the country by 2009, and in 22 locations by 2011. Anticipated domestic demand for wood pellets was 400,000 tons in 2011 and 750,000 tons in 2012. But the demand for pellets for electricity generation is expected to reach 2.88 million tons by 2020, with total demand forecasted to rapidly increase to 5 million tons. The supply capacity for wood pellets within South Korea was only 1 million tons as of 2011, with it claimed that the remaining 4 million tons of this will be covered by imports by 2020.

South Korea’s imports of wood pellets have steadily continued climbing from approximately 7,000 tons in 2008 to about 12,000 tons in 2009 and roughly 21,000 tons in 2010. The countries it imports from have also been on the rise, and include China, Vietnam, Malaysia, Chile, Canada, and Indonesia. In order to cope with future increases in demand, companies that use pellets within South Korea are considering importing wood pellets from Australia, the Philippines, and the United States as well.


Table.  Anticipated wood pellet demand (Unit: 10,000 tons)

  2011 2012 2020
Ordinary households 13 22 84
Boilers (industrial use) 25 50 125
Boilers (public use) 2 3 3
Power generation 288
Total 40 75 500

Source: Wood Pellet Market Development in South Korea
(http://www.pellet.org/linked/2011-05-11%20chris%20lee.pdf)


Table.  Supplies of wood pellets (Unit: 10,000 tons)

  2011 2012 2020
Domestic production 20 40 100
Imports 20 35 400
Total 40 75 500

Source: Wood Pellet Market Development in South Korea
(http://www.pellet.org/linked/2011-05-11%20chris%20lee.pdf)

 

Fig.  Anticipated wood pellet demand (South Korea)
Fig.  Anticipated wood pellet demand (South Korea)

 

Fig.  Supplies of wood pellets (South Korea)
Fig.  Supplies of wood pellets (South Korea)

 

Source:
•  http://www.reeep.org/index.php?id=9353&text=policy-db&special=viewitem&cid=151
•  http://www.bloomberg.com/news/2012-07-20/korea-southern-power-to-buy-wood-pellets-for-renewables-quota.html
•  http://forestindustry.com/feature-article/200/south-korea-and-japan-will-become-large-importers-pellets-and-energy-chips-comin
•  http://www.cmtevents.com/eventposts.aspx?feedid=1461&ev=120935&
et. al.

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