the elasticity of electricity prices and technological advancement in the end use are alsoconsidered in the process. Historically, the electricity consumption growth rate has graduallydecreased as shown in Table 1. The increase rate of annual average power demand in Korea hasfallen from 11.6 percent to 8 percent during the 1990s. It further fell to 5.7 percent during the2005-07 period.The Increase rate of peak demand growth has also gradually slowed, dropping from 9.5 percentin the 1990s to 5.5 percent since 2001. The recent rise in peak demand is the result of theincreased use of air conditioning due to abnormally high daytime temperatures and climatechange. In the BPE, the peak demand growth rate is projected to slow to 2.8 percent per annumduring the 2008-10 period and further to 2.2 percent per annum in 2020.Korea's per capita electricity consumption in 2007 was 8,064 kWh, up from 850 kWh per year in1980. This figure is only 56 percent of the consumption in the United States. But it is higherthan that in Germany and England and equivalent to that of Japan. This implies that demandincrease due to increase in per capita consumption is not expected in the long term.Over the last three decades, Korea has enjoyed 8.6 percent average annual growth in grossdomestic product, which has caused a corresponding growth in electricity consumption - from 33billion kWh in 1980 to 371 billion kWh in 2006. Korea's economic growth rate during the 2008-20 period covered by the latest BPE is estimated at 4.2 percent, which implies a slower growthin power consumption.In the demand side, the increase in electricity demand in Korea is expected to further slow inthe future since many innovative technologies aimed at enhancing energy efficiency and energysaving are being introduced in connection with climate change.
According to the BPE, Korea's reserve margin - a measure of available capacity over and abovethe capacity needed to meet normal peak demand levels - is expected to be less than 10percent until 2011, lower than the usually required margin of 10-20 percent of normal capacity.After 2012, the reserve margin is expected to remain 12-20 percent, which ensures astabilization of demand and supply.Korea's gross power production reached 439 Gwh in 2007. Korea's generation capacity isexpected to grow from 72.5 GWe in 2008 to 100 GWe in 2020. Nuclear power generationcapacity is expected to total 32 GW in 2020, accounting for 31.5 percent of the total generationcapacity. Nuclear plants are expected to generate 250 TWh of power in 2020, covering 45.8percent of national demand (see Figure 1 and Table 3).However, the role of nuclear energy is expected to grow in Korea in the future as thegovernment revised its energy supply plan to cope with climate change. In 2008, thegovernment finalized the first "Korean National Energy Master Plan" which covers the 2008-2030 period.Under this plan, 11 more nuclear units (9,200 MW) are to be constructed by 2030 (in addition tothe eight under construction), while two units would have been decommissioned around 2008 if licenses were not extended. This would boost the share of nuclear to 41 percent of totalgenerating capacity and to 60 percent of power supply.
The status of Korea's nuclear industry