Rae Kwon Chung

You had previously spoken on the importance of greater interconnection across Asia and of a ‘Super Grid’ that could potentially facilitate the import and export of renewable energy among countries such as Mongolia, China, Kazakhstan, Korea and Japan. Could you elaborate on this?

Before, we couldn’t think of linking those remote distances. Now, we have technology available. This technology can connect 3,000, 4,000 and 5,000 kilometers. The Chairman of the SoftBank Group in Japan already calculated the cost of sending electricity from Mongolia to China, Korea and up to Japan. He calculated the cost as two cents per kilowatt for laying a super grid all the way from Mongolia to Japan. Now, technology is not a problem, and even the cost is not a problem. The only issues are political – all issues are political. The electric company of Japan rejected the idea of importing electricity for political reasons and, maybe, for commercial reasons.

You had mentioned that we are, in fact, not far from achieving this interconnection. By how much do we fall short, in terms of infrastructure?

Three hundred and seventy kilometres. It’s a submarine cable. Within Europe, they already have this, from the United Kingdom to Denmark and Norway. They have already connected through a submarine cable, sometimes 200 or 500 kilometres, so this is not an issue.

In China, there is already 3,300 kilometers there, you don’t have to do it again. Kazakhstan is bordering China, so they are very close, they can just be connected – it’s not a big issue at all, even for China and Korea. It’s just a matter of political decision, but it’s not a huge investment. It is also an investment for making money for the businessman.

Because there is an economic case in developing such grids, do you think?

Yes, there is an economic case. You don’t need any government subsidies for it. This is why the Chairman of  SoftBank said he will do it with his own money, to make money. Because in Japan, renewable energy is more than 20 cents [per kilowatt hour]; if it can be produced at six or eight cents, then he can make huge money. But it is a political problem, as I said.

How would you gauge the progress of renewable energy across Korea?

Very bad. They need to take a more decisive action, they are just talking now. There is no strong action, like in many other countries.

What is the level of interest from the Korean government when it comes to importing energy?

There is no political objection to having a grid connection in north-east Asia. The Korean government is open to grid connection, as mentioned by President Moon [Jae-in]. It’s a matter of how you can arrange something that can make a business case.

In a way where government and consumers can both benefit?

Yes, because in Korea we have a renewable energy target set at 25% by 2040, which is a huge target, and 37% reduction target for CO₂ emission. Frankly speaking, without importing of renewable energy, from our side, I am not sure if Korea can really achieve its targets only by domestic action. That’s why I see that there is strong possibility that the Korean government finds it favourable to import electricity.

How would you gauge the progress of Asia towards integration of renewable energy?

Many countries are trying to publicise that they are doing a lot, but in fact, if you look at the real data, the ratio and quantity, the proportion of renewable energy – it didn’t change much. Everybody is saying renewable energy is growing, prices are down and investment is growing. But if you look at the proportion of renewable energy of the total global energy portfolio, it didn’t change much – just six, seven, eight per cent.

Also, fossil fuel subsidy is USD 370 billion around the world, every year, while subsidy for renewable energy is less than USD 50 or 60 billion.

So, we are still predominantly reliant on oil and gas?

That’s right. So, even though we would see positive signals, we still need more decisive action.

You have also extensively discussed the need for an energy transformation in the market. Where does the opportunity lie for stakeholders in the built-environment to contribute to this paradigm shift, especially in view of growing reliance on mechanical cooling, which is currently driving a large chunk of energy consumption, globally?

Personally, I think we should redesign our buildings, because our design of the buildings are closed, and to keep them cool, we need huge energy. We need some kind of ventilation system, using some kind of wind, passive cooling and also geothermal. You can use the geothermal energy for cooling and also heating – it can be one way of reducing the massive burden of energy through the use of air conditioning. But still, for economic reasons, they find it too costly or something like that. It can change, sooner or later, but here the fossil fuel is so cheap.

So the price signals have to come from the government? What measures do you recommend to be implemented to facilitate this shift in the market?

Yes, that’s right. That’s what I mean about transformation. We need a carbon tax, we need to pay for the carbon – otherwise people don’t care. This applies everywhere. But people don’t like carbon tax and don’t want to pay for it, and that’s the issue. But that’s the fundamental tool for change; without it, it would be very difficult.

Which countries would you say have been successful and could serve as models for carbon tax frameworks?

The United Kingdom has already set the target for zero carbon by 2050. Also, Germany is setting a goal for coal exit by 2038. These countries are taking action, and they are proving that it’s possible. Even China is taking very strong action. The UK is importing electric buses from China, and China is the number one maker of electric cars in the world and the number one investor in renewable energy. Why? Because China wants to lead future industrial competitiveness. China is very smart, other countries should learn from it.

Do you see investment in this direction as also something that manufacturers should take into account?

Oh yes… there is consumer demand for innovative, sustainable technologies, even if it is more expensive. If you catch up to those opportunities, you make money. But some companies ignore this, they don’t want to take action on climate change mitigation and renewable energy – that way, they are losing out on their industrial competitiveness. That’s one important point, now here in the UAE, it’s not just about solar panels. They also have to think about investing in developing technologies for the future. And there has to be a price signal change. Without that, there is no incentive. Without policy change, the companies cannot find any incentives and cannot make business case, because the price of energy is so cheap.

I always think technology and policy go hand in hand. Without carbon tax, technology will not reach the market. Like this technology – of harvesting energy from footprint of people – we have it, but because of the price, it’s not everywhere. It’s just here at the Congress for display but not in our everyday life. Why? Because the price is not right and policy does not support it. Technology and policy go hand in hand.

The interview with Rae Kwon Chung took place during the 24th World Energy Congress, from September 9 to 12 in Abu Dhabi. Climate Control Middle East wishes to thank the organisers of the Congress and to the Global Energy Prize for facilitating the interview.