Korea’s Lee Urges Less Power Use, Driving to Avoid Energy Crunch

Lee Jae Myung Photographer: SeongJoon Cho/Bloomberg Photo by SeongJoon Cho /BloombergArticle content(Bloomberg) — South Korean President Lee Jae Myung called on the public to pare back power usage and ride public transport rather than driving cars as his government mounts a national effort to avoid energy shortages should the Iran conflict drag on.Sign In or Create an AccountEmail AddressContinueor View more offersArticle content“We ask for your cooperation in reducing and conserving electricity use,” Lee said at the government’s latest emergency economic meeting in response to the Middle East crisis.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentLee said that if electricity rates remain at current levels, public losses and deficits could widen significantly, as power in South Korea is supplied by the state-run Korea Electric Power Corp. He added that keeping prices at current levels without raising them could drive higher electricity consumption — for example, by prompting some to substitute electric power in place of fuel — which would exponentially increase Kepco’s financial burden.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“This could lead not only to government fiscal losses but also to excessive energy consumption or a lack of conservation,” Lee said. Article contentKepco, which provides about 70% of Korea’s electricity supply, has been mired in a yearslong impasse with roughly 200 trillion won ($133 billion) in debt, as it has often refrained from raising power rates despite surging fuel input costs in an effort to shield consumers from inflation.Article contentThe request comes just a day after Prime Minister Kim Min-seok warned that the nation must prepare for worst-case scenarios. Lee also said it’s more urgent than ever for the nation to come together and share the burden. Article contentArticle contentAuthorities have also stepped up warnings over broader financial risks. The country’s central bank said escalating Middle East tensions and structural vulnerabilities could amplify risks across markets. The potential for heightened volatility in foreign exchange and financial markets as geopolitical tensions in the Middle East could trigger asset price corrections and cross-border capital shifts, the Bank of Korea said on Thursday.Article content“The crisis in the Middle East has continued for nearly a month, but it remains difficult to predict how the situation will unfold going forward,” Lee said. “It’s almost impossible to pinpoint exactly where the risks lie and how far their impact will spread amid a global supply chain that’s far more complex and intertwined than in the past.”Article contentLee’s comments point to rising concerns in South Korea that the knock-on effects of prolonged hostilities in Iran have the potential to disrupt an economy heavily dependent on energy from the Middle East. Policymakers throughout Asia face a similar risk that short-term measures might send the wrong signals to consumers and lead to ballooning costs if the conflict is prolonged.Article contentTrending Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles LNG Canada signs key pipeline agreement required for phase two expansion Energy Canada’s economic performance has been lagging the U.S. for years, and Statistics Canada delves into why Economy Why market bets for interest rate hikes in Canada are so high Economy Wealthsimple receives regulatory approval to offer prediction markets to investors Fintech Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles LNG Canada signs key pipeline agreement required for phase two expansion Energy Canada’s economic performance has been lagging the U.S. for years, and Statistics Canada delves into why Economy Why market bets for interest rate hikes in Canada are so high Economy Wealthsimple receives regulatory approval to offer prediction markets to investors Fintech