north korea energy profile
TRANSCRIPT
North Korea In the Dark:
An Analysis of a Country in Energy Crisis
Chris Leishear
New York University, November 20, 2012
Global Electricity Markets, Professor Jonathan McClelland
Secretary of Defense Donald Rumsfeld brought North Korea’s barren darkness and
the paucity of economic activity to light during a 2002 briefing in which he displayed a
satellite image of the Korean peninsula at night, stating “ South Korea is filled with lights
and energy and vitality and a booming economy; North Korea is dark”. Indeed while the rest
of the world was literally aglow against the dark backdrop of night, the northern half of the
Korean peninsula, a 120,538 square kilometer1 area nearly the size of England, was “as
vacant as the oceans2”. A weak glow could be seen for Pyongyang, the capital, but little else.
What scant electricity that is generated and distributed, is unfortunately, the
provenance of the government elite and the military; the vast majority of the country’s 24.6
million citizens3 receive little in the way of electricity. Entire villages vanish into the dusk 4.
Outsiders see the void and think of remote villages of Africa, the Amazon or southeast Asia,
where the civilizing hand of electricity has yet to reach. But North Korea “is not an
undeveloped country; it is a country that has fallen out of the developed world”5.
At some point in the future, the regime of this isolated Communist state, currently led
by the dictator Kim Jeong Un, the grandson of the “hermit kingdom’s” founding father Kim
Il Sung, will collapse upon itself. Or, perhaps in a game of brinkmanship gone too far, the
regime may topple from the outside. Regardless, the purpose of this paper is not to speculate
on the geopolitical future of North Korea, but rather to assess the current status of energy
production, specifically electricity generation. A brief history of energy production,
development and policy will be followed by two potential alternatives towards the
construction of a more viable energy (and economic) future. For whether the regime opens
up to Western investment and aid, collapses from within (or from without), a massive
undertaking will be required to bring the country in from the cold and dark to achieve energy
parity with the rest of the developed world.
Economy
North Korea has one of the world's most centrally planned and least open economies6.
The CIA World Fact Book estimates North Korea’s overall GDP at US $40B, while per
capita GDP is at $1,800, ranking 197th in the world. GDP grew 4% in 2011 and is driven by
agriculture (23.2%), industry (43.2%), and services (33.6%). Exports totaled $2.5B in 2010
and were comprised of minerals, metallurgical products, manufactured goods including
armaments, textiles, fishery and agricultural products. Imports were valued at approximately
$3.5B in 2010 and consisted of petroleum, coking coal, machinery, textiles and grain7.
Energy Policy
North Korean energy policy has evolved largely in response to changing geopolitics
but also in an attempt to stem the losses of dysfunctional and aging infrastructure. Prior to
1945 the North Korean power mix was essentially 100% hydroelectric. This reliance on
hydroelectric power remained strong in the ensuing decades and thru 1970 hydroelectricity
still provided 90% of total generation while keeping pace with growing demand. During the
1980s seven large hydroelectric plants were in operation, four of which were along the Yalu
River, North Korea’s border with China. The facilities had been built with Chinese aid,
jointly managed, and supplied power to both countries.
But by 1989, the share of production from hydro plants had dropped to 60%. Coal
fired thermal plants, and cheap fuel oil subsidized by the Soviet Union8 provided the
remaining 40% In an attempt to counter the aging hydroelectric infrastructure and the
decreasing efficiencies of the hydro grid, (and with the Soviet Union’s patronage), the
construction of coal-fired thermal plants had began in the seventies, decreasing the reliance
on an aging hydro-based system. But the diversification was too late, and the move towards
coal fired thermal plants could not close the energy gap created by the dual challenges of
growing demand and hydroelectricity’s decreasing efficiencies. North Korea began to
experience electricity shortages.
Earlier in the sixties Kim IL-sung had sent hundreds of students and researchers to
Soviet-bloc universities and research centers to develop a corp of technical expertise in
nuclear engineering. Under the Soviet Atoms for Peace program a small research reactor
1Endnotes:? https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html
2 Demick, Barbara. Nothing to Envy; Ordinary Lives in North Korea. Spiegel & Grau, 2009.
3 https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html
4 Demick, Barbara. Nothing to Envy; Ordinary Lives in North Korea. Spiegel & Grau, 2009.
5 Demick, Barbara. Nothing to Envy; Ordinary Lives in North Korea. Spiegel & Grau, 2009.
6 http://www.tradingeconomics.com/north-korea/electricity-production-kwh-wb-data.html
7 https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html
8 Demick, Barbara. Nothing to Envy; Ordinary Lives in North Korea. Spiegel & Grau, 2009.
(IRT-2000) was built using Soviet technical assistance and materials9. However, the real
goal was nuclear arms. Unable to obtain nuclear weapons from either China or the Soviet
Union, North Korea had their Soviet trained engineers, who used declassified data on the
design and operation of several European reactors (Britain’s Calder Hall, Italy’s Latina), to
reverse engineer their first reactor, a 5 megawatt electric (MWe) gas-graphite reactor, which
became operational in 198610. For North Korea it was an ideal match: gas-graphite reactors
are well suited to countries with limited nuclear construction infrastructure and are perfect
for producing plutonium fuel for a bomb. Natural uranium, which North Korea has in
abundance, is used for reactor fuel, obviating the need for more complex and technically
demanding enrichment facilities11. Touting the benefits of “civilian energy” provided the
necessary cover to begin to develop weapons grade plutonium.
Despite the relatively simplicity of using a gas-graphite reactor to create weapons
grade plutonium, Pyongyang realized that the modern light-water reactors (LWRs), which
South Korea was acquiring from the West, were better suited towards producing electricity.
In 1985, Kim IL-sung asked the Soviets to build two LWRs to meet the North’s growing
demand for electricity. However, the sudden end of the cold war changed those plans.
Almost overnight, North Korea lost access to billions in foreign aid, guaranteed markets, and
“friendship prices” that had been enjoyed from the Soviet bloc, and most importantly the
promise of the 2 LWRs. Concurrently, China moved to open its economy to the West in
support of its market liberalizing agenda. North Korea stood on the sidelines and watched
while both Russia and China reached out to their archrival, South Korea.
In 1992 Pyongyang opened the doors to its nuclear program and allowed inspectors
from the IAEA into the Yongbyon nuclear center. But inspectors uncovered discrepancies
between their nuclear measurements and Pyongyangs’s declarations and the door was
quickly shut. In early 1994 negotiations in Geneva led to the “Agreed Framework”
whereupon Pyongyang was willing to trade its gas graphite reactor program for the promise
9 Hecker, Siegfried S., Lee Sean C., and Braun, Chaim. North Korea’s Choice: Bombs over Electricity,
National Academy of Engineering. http://www.nae.edu/Publications/Bridge/19804/19821.aspx
10 Ibid.
11 Ibid.
of two, 1,000MWe LWRs from the US. Congressional opposition led to a lack of funding
and project commitments fell behind. A complicated procurement process further slowed the
project and ultimately, administration change killed the Agreement12. Today the pariah state
continues their pursuit of nuclear arms undeterred, including the occasional saber rattling and
missile test.
South Korea had also expressed interest in the nuclear bomb in the seventies. But
under international pressure led by the US, it gave up those aspirations and with international
assistance, turned its nuclear focus toward civilian energy13. The divergent nuclear paths
taken by both Koreas have yielded dramatically divergent results. Today, the South Korean
nuclear industry provides nearly 40% of the countries electricity from 23 reactors with a
combined capacity of 20.7GWe14, while North Korea has at most six nuclear weapons and no
nuclear generated energy. South Korea aims to provide 59% of electricity from 40 units by
2030 and recently won a $20.4 B contract to construct 4 reactors in the UAE15. They also
recently won a bid to construct a research reactor in Jordan and have quickly positioned
themselves to become a global export leader in nuclear plants and operations, behind only
France, the US, and perhaps Russia.
In parallel with their nuclear pursuits, North Korea also went full bore into the
development of small and medium sized hydro plants in the nineties, with close to 7,000
constructed during that time. But the efficiency was poor, in part due to the seasonal and less
reliable flows of smaller rivers, and the plants were under operated. As a result, small hydro
contributed little to reverse the massive freefall in electricity production brought upon by the
abandonment of Russia, who now demanded hard currency for coal, and the curtailment of
Chinese aid as they opened to the West. Aging hydro and the inability to upgrade, or even
maintain, the deteriorating transmission infrastructure cemented the decline. The policy of
small hydro was quickly shelved in lieu of a 3 pronged approach in the new millennia that
includes, 1) refocusing on the construction of large hydroelectric plants, 2) the remodeling of
12 Ibid.
13 Ibid.
14 http://www.world-nuclear.org/info/inf81.html
15 Ibid.
power facilities including plants, transmission and distribution lines and 3) demand side
management to reduce demand. But the investment in support of the latest policy change has
not been adequate.
Sporadic monsoons and droughts did not help reverse the freefall of energy
production and the concomitant drop in per capita consumption. Withdrawal and
diminishment of aid from traditional partners Russia and China have only exacerbated North
Korea’s energy crisis. Unfortunately it is the civilian population that goes without; the
military and elite can still be counted upon to divert resources needed for investment and
public consumption16. Finally, the strong political backlash caused by the North Korean
attacks on the South Korea’s destroyer Cheonan and the shelling of Yeonpyeong Island in
2010, has further cooled all global cooperation, including energy aid and development
between the two Koreas17. Future cooperation, assuming the thawing of tensions with the
greater world, will have to be massive and comprehensive to counter years of
underinvestment, poor management, shortages of spare parts, and a focus on non-civilian
energy priorities.
Electricity Generation and Per Capita Consumption
North Korea generally does not release statistics related to energy production but
credible external (and independent) sources are able to extrapolate data and arrive at very
similar results. According to a 2010 World Bank Report posted on the Trading Economics
website (http://www.tradingeconomics.com/north-korea/electricity-production-kwh-wb-
data.html) North Korea produced 21,093,000,000 kWh of electricity in 2009,18 while the CIA
World Fact Book cites 2008 generation levels at 22,520,000,000 kWh. Thus, two different
sources are able to arrive at very similar data points. Since 1990 the supply of oil, coal and
electricity has steadily declined. Annual imports from oil dropped from 23 mn barrels in
1988 to less than 4mn barrels in 1997….causing critical problems in transportation and
16 http://www.tradingeconomics.com/north-korea/electricity-production-kwh-wb-data.html
17 Yoon, Jae-Young. The DPRK Power Sector: Data and Interconnection Options. The Korean Journal of
Defense Analysis. Vol. 23, No.2 June 2011, 175-190. http://www.kida.re.kr/data/kjda/03_Jae-Young
%20Yoon.pdf
18 http://www.tradingeconomics.com/north-korea/electricity-production-kwh-wb-data.html
agriculture. North Korea has no coking coal, but does have substantial reserves of anthracite
in Anju province. But because of the Soviet and Chinese withdrawal of fuel concessions
(required to mine and transport), coal production peaked at 43mn tons in 1989 and steadily
declined to 18.6 mn tons in 1998.19
North Korean electricity generated (kWh) annually, 1967-201020
The World Fact book puts North Korea at 68th in electricity produced worldwide (see
chart next page). Production peaked in 1989 with nearly 30TW of electricity produced and
then rapidly declined21 as Communist sponsorship withered.
Country Comparitive Annual electricity generated in Kwh.
19 http://en.wikipedia.org/wiki/Economy_of_North_Korea#Power_and_energy
20 http://www.tradingeconomics.com/north-korea/electricity-production-kwh-wb-data.html
21 http://en.wikipedia.org/wiki/Economy_of_North_Korea#Power_and_energy
22 https://www.cia.gov/library/publications/the-world-factbook/rankorder/2038rank.html
As North Korea’s energy policy has changed with the times and its geopolitical
relationships, so to have its per capita electricity consumption risen and fallen with the
fortunes of the regime. Low cost fuel provided by its larger communist neighbors and
sponsors helped drive North Korean electricity consumption steadily upward thru the
seventies and eighties as it diversified away from hydro. By 1980 per capita consumption
had reached 1,114 kWh, which continued to climb to 1,247kWh in 1990. However, the
effects of the Soviet Union’s collapse, and the inability of North Korea to meet Russia’s
subsequent demand for hard currency for its energy resources, were immediate and
widespread. By 1995, per capita consumption had declined to 912kWh, and continued to
drop to its low point in 2000 of a paltry 712kWh.
North Korean Electricity Consumption Per Capita, 1967-201023
22 https://www.cia.gov/library/publications/the-world-factbook/rankorder/2038rank.html
23 http://www.tradingeconomics.com/north-korea/electric-power-consumption-kwh-per-capita-wb-data.html
Although the real hemorrhaging has stopped, and a slight increase has been seen in
the last decade, reaching the standard of 1990 seems an impossible dream. IEA
documentation reveals that per capita electricity consumption in 2008 was 819kWh,
substantially lower than the 919kWh recorded in 197124. Population growth, coupled with the
dismantling of the Soviet Union, Chinese trade reductions, the continued poor returns from
hydro, poor management and the diversion of funding, have wreaked havoc on the ability of
North Korea to increase per capita consumption. The floods of the 90’s (sediments filled the
storage waters) and droughts of the aughts, and increasingly unreliable seasonal water flows
have further compounded the poor returns from hydro’s aging infrastructure.
Bank of Korea reports corroborate the data on per capita electricity consumption,
reporting that North Korean energy consumption was between 600-800 kWh per person in
2000, (comparable to many South Asian developing countries at the time) which was roughly
the per capita consumption of South Korea in 1980.25 In 2009, the World Bank reported that
South Korea’s energy consumption per capita was 8,900kWh. By 2008, North Korea’s
population had nearly doubled to 23.9m26 from its 1971 level, yet per capita consumption
was still lower than the 1971 level of 919kWh.
Per Capita Electricity Consumption in Selected Asian Developing Countries as of 2000
24 Hong, Kim Tae. Economic Collapse Reflected in Scarce Electricity. August 6, 2012.
http://www.dailynk.com/english/read.php?cataId=nk00100&num=9629
25 Yoon, Jae-Young. The DPRK Power Sector: Data and Interconnection Options. The Korean Journal of
Defense Analysis. Vol. 23, No.2 June 2011, 175-190. http://www.kida.re.kr/data/kjda/03_Jae-Young
%20Yoon.pdf
26 Hong, Kim Tae. Economic Collapse Reflected in Scarce Electricity. August 6, 2012.
http://www.dailynk.com/english/read.php?cataId=nk00100&num=9629
Power Quality
Overall, the power quality, voltage, and frequency variation of the North Korean
electricity grid is very poor. Jae-Young Yoon, Director of Korea Electrotechnology
Research Institute (KERI) in his “The DPRK Power Sector: Data & Interconnection Options”
provides data sets from defectors (who have experience with North Korea’s 110kV power
transmission systems) and recent visitors to North Korea who have measured the power
qualities of their accommodations during their stay. For 220V rating, the measured voltage
ranged from 177-209, while for 110kV rating the values were within the 88-99kV range, and
the frequency variations for 60Hz rating were typically between 56.7-59.8[Hz], 51.0-
54.0[Hz]. These three sets of measurements demonstrate a 5-20 percent loss in voltage,
relative to the design rating.27
The electricity grid infrastructure is decrepit and outdated. Routine maintenance is
uncommon and significant investments are not made. One major exception to this general
rule of neglect has been that a SCADA (supervisory control and data acquisition) computer
system, used for the monitoring and distribution of electricity, was supplied by China under
the auspices of the United Nations Development Program (UNDP) in the 1990s and has been
operating in several power plants. However, these newer systems have to interface with
aging, infrastructure comprised largely of “made in North Korea” parts that are of
questionable quality. Most of the power plant and grid infrastructure is based on outdated
27 Yoon, Jae-Young. The DPRK Power Sector: Data and Interconnection Options. The Korean Journal of
Defense Analysis. Vol. 23, No.2 June 2011, 175-190. http://www.kida.re.kr/data/kjda/03_Jae-Young
%20Yoon.pdf
Soviet-era designs, and increasingly without factories to build replacement parts. The grid
itself is actually two separate grids that operate at different effective voltages28. The “flat
line” of the chart below, depicting installed capacity, tells the sad story quite clearly: no new
capacity investment or infrastructure upgrades have been seen since the late eighties29.
KERI estimates transmission loss as typically around 20% due to these weak system
characteristics, and the overall system capacity factor is between 30-35%30. Independent
analysis from the US based Nautilus Institute for Security and Sustainability, which has
studied North Korea’s energy situation for years, estimates transmission loses of close to
25%.31 The chronic electricity shortages are a double edged sword as they make it difficult to
28 Ibid.
29 http://www.eia.gov/countries/country-data.cfm?fips=KN#elec
30 Yoon, Jae-Young. The DPRK Power Sector: Data and Interconnection Options. The Korean Journal of
Defense Analysis. Vol. 23, No.2 June 2011, 175-190. http://www.kida.re.kr/data/kjda/03_Jae-Young
%20Yoon.pdf
31 Lavelle, Marianne. North Korea: Nuclear Ambition, Power Shortage. National Geographic, December 20,
2011. http://www.greatenergychallengeblog.com/2011/12/20/north-korea-nuclear-ambition-power-shortage/
mine and transport coal used in the thermal plants. The lack of coal leads to further
electricity shortages. Hydro power plants are also below capacity because the huge floods of
the 1990s led to an accumulation of sediment in the water storage facilities. Little work has
been done to clear away the accumulated sediment32.
Potential Energy Plays, a Path Forward
Assuming that North Korea could free itself from the current “international time-out”
in which it finds itself, there are several feasible scenarios and potential plans that could be
restarted to put it back on the path of sensible energy development. In addition to the
possibility of trading their nuclear arms program for a nuclear energy program (a la their
very successful Southern neighbor), North Korea could be a strategic partner in regional grid
interconnectivity of power lines and gas pipelines. Since the KEDO project which would
have brought 6MW of additional nuclear capacity online by 2020 is delayed indefinitely due
to the breakdown of talks on North Korea’s nuclear weapons program, interconnectivity is
the best of a limited set of options. Russia is particularly interested in interconnection
projects, as this open up energy exports from her resource rich Russian Far East (RFE) and
creates new capital markets33.
The so-called NEAREST (North East Asian Region Electrical System Tie) program
of 2005 resulted in preliminary discussions, plans and the invaluable exchange of
information, but has since been tabled due to international sanctioning. The System would
interconnect Northeast Asian countries including North and South Korea, Russia and Japan,
depending on which of the 4 NEAREST scenarios are considered. The two scenarios not
providing North Korea energy (one uses North Korea as a “right of way” for interconnection
and the other involves submarine cables between Russia and South Korea, bypassing North
Korea to shore up South Korean energy security) are not considered here. The first
interconnection scenario involves power exchanges via the construction of an interconnected
power system. Converter stations would be located in each country and would be connected
by a DC overhead transmission line running 1,010 km between Russia (Vladivostok) and
North Korea (Pyongyang) and then 250Km between South (Seoul) and North Korea.
32 Nakano, Akira http://ajw.asahi.com/article/asia/korean_peninsula
33 Yoon, Jae-Young. The DPRK Power Sector: Data and Interconnection Options. The Korean Journal of
Defense Analysis. Vol. 23, No.2 June 2011, 175-190. http://www.kida.re.kr/data/kjda/03_Jae-Young
%20Yoon.pdf
Scenario 1: 3 Terminal HVDC Interconnection Diagram (ROK = Republic of Korea and DPRK equals
the Democratic Peoples Republic of Korea. 34
Russia would supply power to both Koreas with the power flow consistently maintained in
one direction.
The second scenario involves the construction of Back to Back (BTB) converter
stations at the borders foregoing the construction of new long distance HVDC transmission
lines.
Scenario 2: Back to Back HVDC interconnection35
However, this takes on significantly more risk as North Korea’s weak power system
would not guarantee the reliability sought after by its neighbors. This would require North
Korea to significantly upgrade its internal power and transmission systems to make itself a
34 Ibid.
35 Ibid.
more attractive partner in a BTB HVDC interconnection scenario36.
Scenario 1: 3 Terminal Interconnection Scenario 2: Back to Back converters
Route South, North Korea, Russia South, North Korea, Russia
Min. Power 2 GW 1 GW
Max Power 4 GW 4 GW
Cost Medium Small
Energy Security Normal Bad
Despite the higher cost, current analysis suggests that Scenario 1 is the more realistic
owing to the creation of new Transmission Lines that negate the need to overhaul North
Korea’s aging grid infrastructure37. This would provide the reliability required by South
Korea while bypassing the usage of the tricky North Korean grid.
Renewables
North Korea’s mountainous terrain coupled with an abundance of undeveloped coast
line on the Pacific Ocean and Yellow Sea, make it an ideal candidate for wind power, but
unfortunately because of the more pressing energy concerns (shortages, aging power
systems, lack of investment and international cooperation) this sector has seen little
development. Solar power is not suitable at scale given the limited amount of sunshine per
annum. However, given the challenges faced by the nationwide grid, distributed solar on
residential rooftops at very small scale could at least bring a limited dose of power to the
millions of rural poor currently without a single light bulb at night, but penetration remains
extremely low.
Environmental Impact
For the first 60 years of the twentieth century, relying heavily on hydro for its
generation mix, North Korea was not a tremendous emitter of C02. However, as the
36 Ibid.
37 Ibid.
generation mix increased the amount of coal and fuel-oil burning thermal plants, C02
emissions rose. Today it is not uncommon to find that coal is pulverized, gasified, and
converted into fertilizer, a highly inefficient and polluting way to make fertilizer. But lacking
natural gas, (the common feedstock for fertilizer), and being cutoff from most global trade
and cooperation, the regime has little choice, much like South Africa during apartheid or
Nazi Germany doing WWII. Because the countryside is largely bereft of electricity, and as is
common in energy-short countries, deforestation is rampant, as people burn wood, twigs and
any other harvestable biomass that can be used for fuel38. As the following graph39 keenly
demonstrates, carbon emissions rose (and fell) with Soviet sponsorship of fuel oils and coal.
38 Lavelle, Marianne. North Korea: Nuclear Ambition, Power Shortage. National Geographic, December 20,
2011. http://www.greatenergychallengeblog.com/2011/12/20/north-korea-nuclear-ambition-power-shortage/
39 http://www.eia.gov/countries/country-data.cfm?fips=KN#cde
Conclusion:
North Korea’s energy prospects are not good. Aging infrastructure, shifting
geopolitics, isolation from the world and poor governance with warped priorities have
conspired to create one of the most pressing energy crisis’ of our time. The lack of energy
and electricity has stunted the country’s economic prospects and growth, has imprisoned the
civilian population in a feudal existence without light and modern technology while those in
power funnel energy resources to reinforce their own sense of grandeur and to maintain their
grasp on power.
South Korea has demonstrated to the world how the transparent development of
nuclear energy can benefit a country but North Korea’s dogged pursuit of nuclear arms has
isolated it from a worldwide community that would otherwise embrace it (as they did South
Korea). North Korea has gotten very little in return for its huge investments in its nuclear
program and even its technical accomplishments have been negated by international
sanctions and isolation.40 Giving up the bomb would be a giant first step in alleviating their
dire economic and energy straits.
While there is some potential for wind and limited solar (distributed at private
homes), there is not enough potential in renewable energies to provide substantial relief to
the national dilemma. International cooperation, cooled for now, is generally available, but
the regime’s history of brinkmanship, saber rattling and unpredictable behavior alienate all
but the most motivated of partners and aid-givers.
There does seem some potential with interconnection to the vast energy stores of
Russia’s Far East and exchanges with South Korea, but this requires stability, commitment,
and transparency, all of which are in short supply within the regime. Their frenetic nature
does not make them an attractive partner. At some point the world will have to grapple with
North Korea and it is better to try and coax them now to invest and upgrade (and abandon
their nuclear arms pursuits) than to wait until chaos intervenes, forcing a more expensive
40 Hecker, Siegfried S., Lee Sean C., and Braun, Chaim. North Korea’s Choice: Bombs over Electricity,
National Academy of Engineering. http://www.nae.edu/Publications/Bridge/19804/19821.aspx
global solution. At some point in time, the sun will set on the Kim dynasty and while it may
not be palatable to continue to try and coerce and cajole them to the negotiations table, it
would be much better in the long run to develop their energy systems now.
Addendum:
41
41 http://www.eia.gov/countries/country-data.cfm?fips=KN#elec