The time may soon come for Korea, whose electricity market is monopolized by a state-run company, to introduce competitive arrangements, according to the chief of a global research firm specializing in the energy business.

“Throughout history, it has always made sense to have one, often state-run, company to keep control over the nation’s electricity industry,” Clint Wheelock, managing director of Navigant Research, told The Korea Herald in an interview.

As the primary intention of the business is to spread electricity to as many as possible, the power market tends to be prevalent in most countries in the world, he explained.

“But in the modern era, market competition became a plausible solution to boost the energy demand-supply balance and to improve the quality of the provided energy.”

Reflecting the need for a new paradigm, the world’s leading countries in the energy sector have been experimenting with various business models, according to Wheelock.

“For instance, the state of California has adopted a so-called decoupling system, to separate the revenues from profits for electric power companies,” he said.

This unique system has made it possible for the U.S. state to implement aggressive energy efficiency programs, without harming the public nature of the industry, he added.

“The choice is for the Korean government to make, whether or not to maintain the current monopoly by the state-run Korea Electric Power Corp.,” he said.

“But it seems at least that KEPCO needs stronger drives in order to step out of the conventional way of business and to seek for new horizons.”

KEPCO’s market dominance also means that it must take all the blame when an unexpected problem occurs, as was the case in Korea this summer.

With the consecutive shutdowns of several nuclear power plants, the nation suffered from an unprecedented power shortage, narrowly avoiding a massive blackout.

“But the big question is not so much about monopoly or competition,” the energy expert said. “What counts is whether governments are able to control the surging demands on micro grids, incorporating a variety of power sources into an integrated system.”

He thus picked “decentralization of power sources” as the keyword of the future energy industry.

Under this new comprehensive grid system, demand management will become one of the most important factors, he explained.

“The world energy market is seeing a variety of factors such as the disputes on nuclear energy, doubts on renewable energy, and the rise of natural gas,” he said.

The energy chapter should nevertheless be approached in a macroscopic point of view, according to Wheelock.

“Since the 2011 Fukushima disaster, energy has become a highly emotional issue, especially for Korea which is located close to Japan and which is blocked from the rest of the continent by North Korea,” he said.

“But it should at all times refrain from being swayed by emotional factors, such as the excessive fear (of) nuclear energy, and objectively face its energy reality.”

By Bae Hyun-jung (tellme@heraldcorp.com)