Insight "Electrification Does Not Automatically Mean Decarbonization"…Hong Ui-rak, CEO of Korea Gas Corporation, Presents Energy 'Realism'

[Energy·Policy] Hong Ui-rak, President and CEO of Korea Gas Corporation, has raised weighty questions about the practical limitations and future direction of South Korea's energy policy through social media following the completion of the parliamentary audit.

President Hong warned against policy tendencies that only tout unconditional electrification and decarbonization slogans, and strongly called for a "feasible energy transition pathway" grounded in reality, supported by the bridging role of LNG (liquefied natural gas).

"Electrification and decarbonization are separate concepts…LNG's value should be reassessed as a bridge energy"

President Hong began by addressing "electrification," a major topic in global energy markets. While diverse sectors—including automobiles, industry, and heating and cooling—are transitioning from direct fuel combustion to electricity use, he asserted that "the age of electricity does not necessarily mean an escape from the fossil fuel era."

Electricity is not an energy source that exists independently but merely a secondary energy form, with the sources for power generation still being coal, gas, nuclear energy, and others.

He stated, "Electrification is not the most efficient choice in every sector," and pointed out that rather than adopting a dichotomous approach, energy resources should be allocated considering national efficiency, economic viability, and stability.

While acknowledging the need to expand renewable energy and nuclear power, he emphasized that realistic energy systems must be taken into account. President Hong recommended that "rather than unconditionally rejecting fossil fuels, we must develop low-carbon, clean technologies and secure the necessary bridge in the transition to clean energy," adding "LNG is not about using it forever, but rather properly deliberating its role in a realistic pathway toward clean energy."

"In the AI and semiconductor era, gas for power generation is national competitiveness itself"

He further noted that we are entering a period of structural transition marked by explosive growth in electricity demand due to AI, semiconductors, data centers, and large-scale mega projects.

He presented the proposition that "gas becomes electricity, and electricity becomes national competitiveness," highlighting the multifaceted role of gas. When gas is used for power generation beyond being a simple industrial raw material, its price and supply stability directly impact electricity prices and the national economy as a whole, not merely corporate costs.

President Hong warned, "Gas for power generation is not merely a commodity; the moment it connects to electricity, it becomes the core of national competitiveness," and cautioned that "if the gas market, ecosystem, and distribution structure collapse or lose their public nature and fairness, it directly leads to a decline in national competitiveness."

Breaking away from short-term profit-focused SMP structure…Calling for power and gas market restructuring

Reflecting on the parliamentary audit, he expressed regret, stating, "While Korea Gas Corporation may have been present at the audit venue, the discussion of LNG—the real core issue—was nowhere to be seen."

He also pointed to the sharpening of conflicting interests surrounding the wholesale electricity price (SMP) amid changing roles for renewable energy expansion and LNG power generation, noting that "the allure of SMP itself should not become the goal of the electricity market." Electricity prices are the cost for the entire industry and the very essence of national competitiveness, transcending the short-term profits of power generators.

Industry observers interpret this as a head-on challenge from the state energy corporation CEO regarding the need for market restructuring from the perspective of the electricity system's public interest and national industrial costs, amid intensifying conflicts over settlement mechanisms and SMP price structures between renewable energy and private LNG power generators.

Finally, President Hong emphasized, "The arrows of energy transition, changing electricity demand, and the AI era have already been released," and stated, "what we must do now is soberly examine the trajectory of those arrows and verify whether we are heading toward the target," calling for a national-level structural policy redesign linking gas, electricity, and industry.