Issue Possible tariff increases and weather volatility as constraints on Korean building energy demand

Summary

Several factors could hold back or destabilise energy demand in Korean buildings over the outlook period. Given the deficits of Korea Electric Power Corporation and the unrecovered receivables of Korea Gas Corporation, further increases in residential electricity and city gas tariffs are possible. Such increases would act as a constraint on growth in electricity and city gas demand. The declining energy share of energy-intensive service industries such as accommodation, restaurants and wholesale and retail trade also slows commercial energy demand. Frequent abnormal temperatures add a further source of volatility to building energy use. Building demand grows 0.8 percent a year in the baseline, but these factors could push the actual path above or below it.