[Soup] Everyone, how much did you pay for this heating bill?

Hello readers!

Today (2nd), Mabu News is going to talk about the heating cost, which was a mess in many ways.

Did you, readers, get your heating bill for February?

It was said that it was issued in some areas, but when I checked Mabu News, the February heating bill came out before I knew it.

I opened it with a trembling heart, but the result was...

?

It was fortunate that the city gas bill in January came out so high that it came out lower than last month.

However, I think I still feel agitated when gas rain comes out, which I have never filmed before.

With the arctic cold wave due to the abnormal climate, we have no choice but to turn on the heating, but the cost of gas is so high that I'm at a loss as to what to do.

Today, Mabu News would like to ask our readers this question.

Heating cost shock, let's start with the situation

First of all, I'll try to sort out how much the gas cost has risen and why it's such a mess.

Korea Gas Corporation provides data on wholesale rates for natural gas used for city gas by year.

Of course, it was not organized in a table so that you can see it at a glance, so I had a hard time organizing it.

Let's take a look at the graph below.

The graph below compares the wholesale rates for residential gas, that is, the gas we use to heat our homes, and the wholesale rates for industrial gas during the winter, from January 2016 to January this year.

The unit is the price per 1 MJ.

As you can see from the graph, the price of natural gas for industrial use was originally cheaper than for residential use.

Besides, the flow was similar.

However, from the second half of 2020, industrial gas prices start to fluctuate.

Then, in March 2021, it reversed for the first time, and from July to January 2023, industrial gas was more expensive than residential gas.

On the other hand, natural gas for housing continued to be frozen at 12.9 won from July 2020 to March 2022.

See the horizontal line drawn?

Then, in April, May, July, and October of 2022, prices rose one after another, and as a result, this heating cost shock occurred.

This time, I added a new line to the same graph.

The green dotted line in the graph below is the price of natural gas.

International natural gas prices start to rise from the second half of 2021 and start to soar from the time Russia invaded Ukraine.

Of course, if the price of raw materials rises, it will affect the price of imported gas in Korea, right?

So, if you look at industrial wholesale rates, the price increase has been made in a similar flow to the price of natural gas.

On the other hand, the wholesale rate for housing was 12.9 won even when international natural gas prices soared.

It's not that Korea Gas Corporation didn't want to raise gas rates for housing.

The price of natural gas is skyrocketing, but if you keep providing it at a low price, it is a business that is losing ground for the corporation.

If you do business like that, KOGAS will only increase debt, so I have applied to the government (Ministry of Industry) to raise the cost of raw materials.

However, even from the government's point of view, the economy is shrinking due to Corona 19, and it was difficult to decide on an increase because raising public charges would increase the burden on the common people.

After all, for a long time, residential gas rates have been frozen.

Now, the government and the ruling party are pointing out this part and shifting responsibility, saying, “The last government ignored the gas corporation’s request for an increase.”

It means that the gas rate increase request was ignored 8 times and the presidential election was lost, and immediately after that, it was raised.

However, the increase in gas prices in April, May, July and October of last year was already decided at the end of 2021.

It is true that the last government did not raise residential gas prices compared to industrial ones, but it is difficult to see it as a fact that it was defeated in the presidential election and decided to raise it right after that.

But still, the political world continues to blame you for heating bills.

Is an energy crisis on the horizon?

Today, Mabu News is going to deal with a more fundamental issue than focusing on the heating cost issue.

It's about the gas used for heating, that is, the energy.

In fact, the root cause of this heating cost shock can be said to be the Russian invasion of Ukraine.

If the price of raw material for city gas, that is, international natural gas, has risen, Korea, which buys and uses it, has no choice but to raise gas prices.

Not only Korea, but also European countries that were directly affected by the Russo-Ukrainian War suffered a serious energy crisis.

Gas prices have also been raised.

The reason why we are focusing on energy issues is that Korea is likely to be exposed to greater risks regarding energy in the future than Europe.

Because Korea buys too much energy from abroad.

I'll explain how long I've been buying it by looking at the data provided by the National Energy Statistics and Information System (KESIS) one by one.

The material to be used is energy flow data from KESIS.

Energy flow is a data that can literally check the flow of where energy is imported and where energy is produced in Korea.

The graph above is the current state of energy supply in Korea as of October 2022, the most recent data.

Crude oil, refined raw materials, and petroleum products account for the largest portion of Korea's energy.

This accounts for 40.4% of Korea's primary energy supply.

It is followed by 22.1% of energy from bituminous coal (and others), 17.0% from LNG, and 13.9% from nuclear energy, but the problem is that all of these guys are imported.

Crude oil, petroleum products, LNG, bituminous coal, and uranium are all imported from overseas, and domestic production is zero.

Only 6.1% of all energy produced by Korea directly!

Hydropower/renewables and others, only 6% of thermal energy and 0.1% of anthracite.

The remaining 93.9% are all dependent on foreign imports.

If you compare Korea with European countries, you can immediately see that Korea's dependence on energy imports is overwhelming.

Let's look at the graph below.

Based on Eurostat's 2021 data, the EU's 27 member states' energy import dependence is 55.6%.

On the other hand, as of 2021, Korea's energy import dependence is 92.3%.

Among European countries, only Malta (97.1%) and Luxembourg (92.5%) are more dependent on imports than Korea.

However, Malta's area is only one-sixth of Jeju Island's, and Luxembourg is also a small country with only Busan, Ulsan, and Changwon combined, so it is difficult to find comfort in these two countries.

Germany, which has suffered particularly badly from friction with Russia, has an energy import dependency of 63.9%.

It is much better than Korea, but natural gas was particularly dependent on Russia.

Among the natural gas imported by Germany in 2021, it was about to be 66.4 % of Russian.

What if imports of Russian gas completely ceased?

Even if Germany finds a natural gas source to replace Russia, it is estimated that over the next year it will be short of 30% of its gas consumption, or 8% of its total energy consumption.

If this happens, there are projections that German GDP could decrease by up to 3%.

If Germany, which is 63.9% dependent on energy imports, is at this level, what will happen if a situation similar to Russia occurs in Korea, which is more dependent than that?

Of course, hasty predictions are dangerous, but Korea has a higher proportion of imports than any other country, so it may be more affected than Germany.

If that happens, energy prices will skyrocket, and the damage will be borne by all of us who use energy.

Europe's Efforts to Overcome the Energy Crisis

From 1991 to the present, Korea has been importing over 90% of energy from overseas without skipping a beat.

Lowering the import ratio will make energy management and operation even a little more stable.

In the long run, we need to secure the energy we produce instead of imported energy while increasing the share of renewable energy, but what should we do to secure stability in resources such as crude oil and LNG that we import right away?

In the first place, resources such as oil that are not produced in our country cannot suddenly be created.

When Russia strangled Europe with its natural gas resource, Europe's option was to secure other energy supply chains instead of Russia.

First of all, we took measures to increase US LNG imports, which was immediately negotiable.

Not only this, Europe turned to secure more stable and sustainable supply chains, and that was Africa.

Africa is a region close to Europe and yet equipped with gas supply infrastructure.

In addition, it is a good alternative to Russia because of its rich energy development potential.

Europe is increasing its natural gas development and investment in Africa to diversify its energy supply chain.

We plan to expand cooperation with Africa not only in natural gas but also in renewable energy and hydrogen.

Of course, there are risk factors that Russia's influence is large and there are many countries with unstable regimes in Africa, but Europe, which has learned from the conflict with Russia that it needs to secure various energy supply routes, is likely to make more aggressive investments in the future.

Europe's supply chain diversification is also a point that Korea should refer to.

If you look at the energy resources that Korea is importing, you can see resources that require diversification of the supply chain.

Looking at the country of origin of crude oil imported and used by Korea in October, 65.3% came from Middle Eastern countries.

Among them, crude oil from Saudi Arabia accounts for 34.1%.

Not just crude oil.

Enriched uranium used in nuclear power generation is 33.8% imported from Russia alone.

Besides, we've already experienced the disruptions caused by supply chain disruptions.

Readers will probably remember it too.

97% of urea imports depended on China, but the urea water crisis occurred due to China's export controls.

If a problem such as the number of elements occurs in the energy supply chain, a panic beyond the confusion at the time could come to our country.

In order to prevent that, you will have to prepare from now on.

Experts also point out that various scenarios must be established and strategies must be prepared to prepare for future global supply chain crises.

A country that uses energy like water?

Along with stabilizing the supply chain, reducing energy waste has been a top priority for European governments.

It also announced that it would reduce natural gas consumption by 15% starting this winter.

Government offices in Germany, France and Spain have limited heating temperatures to 19 degrees in winter.

The International Energy Agency (IEA) explained that if you lower the heating temperature in Europe by 2 degrees, you can save as much energy as natural gas supplied through Russia's Nord Stream gas pipeline in winter.

In fact, Korea tends to use energy cheaply.

Looking at the household trend survey in the third quarter of 2022, the amount we spent on fuel costs was about 75,000 won per month on average.

On the other hand, the amount used for communication expenses was 131,000 won.

Of course, in winter, fuel costs will rise compared to the third quarter, but on average, we are using fuel at a lower price than telephone and Internet costs.

Energy efficiency is also very low in Korea.

There is an organization called ACEEE, which calculates the International Energy Efficiency Score for major countries every year.

It was calculated and indexed how much the country is trying and how good the energy efficiency of buildings, industries, and transportation is. In 2022, Korea's score is 53 points out of 100 points.

If you look at countries that use electricity efficiently, most electricity rates are high.

Scatter plots were plotted with ACEEE energy efficiency scores and electricity rates in each country.

It can be seen that most energy-efficient countries have high electricity rates.

European countries such as Germany, Italy, and the United Kingdom are representative.

For reference, the size of the circle in the graph represents electricity consumption per capita.

Energy efficiency is not good, but electricity rates are cheap, so it can be said that Korea consumes a lot of energy relatively.