North Korean Cabinet Standing Committee Meeting Held, Results for Third Quarter People’s Economy Announced
North Korea announced the results of the people’s economy plan for the third quarter and named construction as its major accomplishment. In particular, many monumental edifices of the Songun era were built and recognized to have strengthened the material and technical foundation of its national economy.
The Korean Central News Agency (KCNA) reported on October 22 that such economy achievement was reported at the extended meeting for the Cabinet Standing Committee.
According to the KCNA, evaluation of the major sectors of people’s economy was made at the Cabinet meeting, commending the construction of thousands of new factories and companies.
In particular, construction of various new buildings were introduced including the new National Gift Hall, along with Pyongyang Folk Village, Rungna People’s Pleasure Ground, Rungna Dolphinarium, Sunrise Restaurant, and other modern cultural and service facilities. In addition, new buildings were built in campuses of Kim Hyong Jik University of Education and Koryo Songgyungwan University as well as other monumental edifices and major light industry factories. Such constructions are attributed to the improvement of consumer goods production and accredited to be advancing the modernization of people’s economy.
Additionally at the meeting, power and coal production was reported to have improved and production for major industrial products such as air compressors, transformers, jack hammers, coal wagons, power cables, cement and salt were also specified to have increased, contributing to the development of local industries.
Specific cases from Changsong County and Hoeryong City were presented to emphasize the improvement of local industries. The industrial production volume was claimed to have exceeded by 107 percent for the local industrial development plan for the quarter and adding strength to the modernization process for the local industries.
In the agricultural sector, considerable damage was reported for the third quarter as the North experienced floods and typhoon but asserted repair efforts for the damages took place appropriately.
The national budget income plan for the third quarter was recorded at 109.6 percent while local budget income plan was explained to have exceeded by 113.4 percent.
Following the meeting, major tasks for the economy for the fourth quarter were discussed. They included elevating the cities and counties to serve as regional bases, early response system to repair damages caused by natural disasters, and preparation to promptly carry out the 12-year compulsory education plan.
The law for the 12-year compulsory general education was recently adopted by the cabinet at the Supreme People’s Assembly meeting on September 25.
According to Yonhap, the DPRK also held a recent cabinet meeting–date unknown. A cabinet meeting is where we would expect more serious deliberation of economic policies taking place. According to the article, however, the meeting featured rather standard agenda items (as best I can tell):
North Korea has held a cabinet meeting to discuss the country’s economic issues, a Chinese state media said Monday, as the communist regime reportedly makes efforts to reform its sickly economy.
The People’s Daily reported on its Chinese-language Web site that North Korea’s cabinet members recently gathered to review the country’s third-quarter economic performance and discuss targets to be achieved in the fourth quarter.
The meeting was presided over by North Korean Prime Minister Choi Yong-rim, the report said, citing the cabinet’s mouthpiece “Democratic (North) Korea”.
The report did not disclose when the meeting was held.
In the third quarter, North Korea saw a substantial increase on-year in its output of electricity and coal, the report said.
It also boosted production of air compressors, transformers, mining machines, wire, cement and other industrial products in the July-September.
Accordingly, the local industry has achieved an output level 7 percent higher than its original plan, while local budget revenues were 13.4 percent higher than original estimates, the Chinese newspaper said.
The North Korean cabinet members shared the view that the fourth quarter will be an important period for the regime to achieve its annual economic target for this year.
In a bid to achieve this year’s target, the country will continue to focus on producing electricity and coal, the report said.
The cabinet also agreed to fully implement universal 12-year compulsory education, promulgated at the Supreme People’s Assembly last month.
Speculation has recently risen that the secretive regime will take legal steps to start economic reforms as new leader Kim Jong-un is seen to be seeking to consolidate his power partly through fixing the broken economy.
The original data is behind a firewall (as best I can tell), so here is coverage of the report in the Daily NK:
Based on International Energy Agency (IEA) documentation, the statistics, which were made public on the 6th via Statistics Korea’s ‘North Korea Statistics Portal’, reveal that per capita electricity consumption in 2008 remained just 819kWh, substantially lower than the 919kWh recorded in 1971.
The figures are just the latest symbolic indicator of the protracted economic decline that began in the 1990s, when the national economy collapsed following the fall of the Soviet Union and the sudden demand that the majority of fuel imports be paid for in hard currency.
Rooted in the provision of low cost fuel by its larger communist neighbors, North Korean electricity consumption had risen steadily until 1991. By 1980 it had reached 1114kWh per capita, a figure that rose again over the next decade to reach 1247kWh by 1990. However, by 1995 it had declined precipitously to 912kWh, and at its nadir in 2000 per capita usage figure was just 712kWh.
This decline was subsequently arrested; however, the following seven years (including 2004 (787kWh), 2005 (817kWh), 2006 (797kWh) and 2007 (762kWh)) reflected how the country was (and remains) unable to recover to the 1990 standard, with population growth outstripping improvements in electricity generation.
In 1971, North Korea had a population of just 14.6 million, but by 2008 this was estimated to have risen to 23.9 million.
The Beijing branch of the Joint Venture and Investment Committee of North Korea (JVIC), called the Choson Investment Office, announced on July 18 of various preferential conditions to foreign investors and employment conditions on its website.
The Choson Investment Office opened its doors this year and is the only overseas branch of the JVIC, in charge not only of securing foreign capital but cultural and science and technology exchanges and cooperation.
The website posted an article titled, “Problems Investors Face,” which provided useful information for foreign investors in a question and answer format.
In the article, the employment conditions for workers were included. The minimum monthly wage for workers in North Korea was set at 30 euros or about 42,000 KRW. In addition, foreign companies must pay 7 euros to each employee separately as social insurance. Overtime pay also needs to be paid and at the event of work related injuries or illness, the company is responsible for handling the situation with its board of directors.
In comparison, the minimum monthly wage for North Korean employees in the Kaesong Industrial Complex (KIC) is 110 USD or about 125,000 KRW.
As for preferential tax policies, foreign-capital companies that are not joint venture are exempt from certain taxes including tariffs on exports and resource tax for the development of mines.
North Korea will bear the land use tax, which is 1 euro per square meter, and China and other foreign investors will have no restriction for mining the underground resources.
The income tax rate for the foreign capital companies was specified at 25 percent and business tax between 2 to 10 percent will be collected from transportation, power, commerce, trade, finance, insurance, tourism, advertisement, hotel and entertainment industries.
Power is the main concern for most foreign companies and it will be provided at 0.053 euro per 1,000 kilowatt. The DPRK’s central trade guiding organ will oversee the setting of prices of goods while the trademark rights will belong to the company.
The DPRK’s Joint Venture and Investment Committee was expanded and reorganized in July 2010 from Joint Venture and Investment Bureau, with main activities centered around Hwanggumpyong Island and Rajin-Sonbong development.
The main agents for foreign currency earnings are the cabinet, military, JVIC, and Daepung International Investment Group*. Most of the trading companies are affiliated with one of the four groups.
In March, JVIC announced through the KCNA that “As the investment environment is favorably changing, joint venture and investment contracts are increasing. Investment interests from large companies are rising especially in our abundant rare-earth and underground resources as well as building railroads, roads, and power plants.”
[U]nder the terms of the [Kyoto] protocol, North Korea, as a developing country and a member of the United Nations, has the right to build clean energy projects that may apply for Certified Emission Reductions, or CERs, popularly known as carbon credits. The North Koreans can then sell them to a rich country or company that needs the credits to offset its own greenhouse gases. Dig into data from the UN’s Framework Convention on Climate Change, and you will find seven North Korean projects registered for carbon trading.
This is where Miroslav Blazek comes in. Blazek, director of Czech company Topic Energo, acts as a link between North Korea and potential carbon credit buyers. He says his experience as manager of a tractor factory in socialist-era Czechoslovakia is invaluable for doing business with the communist North Koreans. “I can work with them because I understand how their system works,” he says. “If I send an e-mail and still don’t have a reply in several days, I know it’s not because they didn’t see it but because it had to work its way through the chain of command. For me it’s like a trip down memory lane.”
North Korea is now building seven hydroelecrtric plants, which provide some of the cleanest energy going. Most can earn tradable carbon credits. Blazek says the North Koreans “jumped” at the opportunity to get into carbon trading: “They immediately grasped that this is a way to make money.” Korea’s seven dams may generate as many as 241,000 CERs a year, worth almost €1 million ($1.3 million). “The projects are already in a relatively advanced phase,” says Ondrej Bores, director of carbon advisory services at Virtuse Energy in Prague, who’s worked with Blazek on other deals.
Still, selling anything made in North Korea has its challenges. More than 30 potential buyers pulled out because of the U.S. embargo on trade with North Korea. Blazek finally struck a deal with a Chinese-controlled conglomerate that needs credits to offset emissions from facilities in Europe. He won’t name the company, citing a confidentiality clause.
UPDATE 8 (2012-2-14): I have been notified that the certification program is proceeding. From a reader:
There has been a statement by the 1718 committee (on sanctions) that CDM projects in NK do not violate UN rules.
[Seven] hydropower plants did get their validation and underwent a process of “clarifications and corrections” as foreseen by UN rules. After the final report (which might have been already issued or might be issued soon) they will go for final vote to the UNFCCC.
Currently, North Korea works on projects as diverse as methane gas from coal mines, biogas and electricity-saving light bulbs.
UPDATE 6 (2011-7-11): It looks like none of the DPRK power stations have been approved by the UNFCC for the CDM program as of this date. A reader notes:
[I] just searched through the entire CDM database with the category numbers for these projects, and as far as I can see none of these has got beyond validation phase['s] comments phase, and judging by some of the comments – “It is evident from the PDD [Project Design Document] that the values are consistent and it is definitely forged and cooked up values to show a non CDM project as a CDM project” – being one of the more polite, that I’d be amazed if they make it beyond that. [It] looks like the DPRK hasn’t got its environmental and managerial audit systems quite up to date yet.
UPDATE 5 (2011-7-11): I just checked the UNFCC web page, and it appears that in addition to the hydro power plants mentioned below, the North Koreans also submitted the “Energy Efficiency Improvement Project in Pyongyang Textile Factory” [sic] for carbon offsets on May 23, 2011. According to the UNFCC web page, the project is in the portfolio of the Carbon-Trade Division, GBCIO, Ministry of Foreign Trade.
UPDATE 4 (2011-7-11): DPRK begins construction of Ryesonggang Power Stations 3 and 4
Pictured above (Google Earth): Ryesonggang Youth Power Stations 1, 2, and 6 (례성강청년발전소).
I have not had the time to pinpoint the exact locations of these power stations using Google Earth. Since the imagery is older, it will take some time to match up the mountain contours. However, we have a general idea where they are located: between the Ryesonggang Power Stations 2 and 6. These are mapped out in the image at the top of this post. The satellite imagery is of Thosan (토산군) and Kumchon (금천군) counties.
Since I have a job, am in graduate school, am a landlord, and running this web page, I have not had time to follow up with the UNFCC to see if they have approved these projects for the Clean Development Mechanism (CDM). If there is an enterprising journalist or reader who cares to find out the answer, please let me know.
UPDATE 3 (3/23/2011): According to the UNFCC web page (select Democratic People’s Republic of Korea in the “Host Party” box), these are the eight power stations that have been submitted for consideration:
The UNFCC web page does not mention the locations, size, or power generation capacity for most of the dams, but I am sure that information will trickle out over time. With the exception of the Kumya Power Station (See satellite image below), none of these facilities are visible on Google Earth–but related facilities are: the Paektusan Power Station 1 (See satellite image below) and Ryesonggang Power Station 1, 2, 6 (See satellite image below). The Hamhung Power Stations are probably in or near Hamhung, and the Wonsangumin project is probably near Wonsan.
And according to an email from the UNFCC:
This list contains all the projects which have already started and for which a notification of CDM prior consideration has been submitted. This notification is necessary to prove that the incentive of the CDM was a decisive factor for taking up the project when a project has started before a project design document (PDD) has been published for global stakeholder consultation or a new methodology in connection with the project has been submitted. However, kindly note that these projects have not yet entered the CDM project cycle as lined out in the CDM rules, requirements and procedures, and to submission for registration has yet been made.
Further details on the CDM project cycle are available here: http://cdm.unfccc.int/Projects/diagram.html
More information will be added here as time passes.
UPDATE 2 (3/11/2011): The DPRK has apparently registered eight power plants with the UNFCC. According to Reuters:
North Korea has registered eight hydroelectric plants with the United Nations, and if approved, could allow the world’s most reclusive state to sell carbon offsets to earn precious hard currency.
These hydropower projects were registered with the United Nations Framework Convention on Climate Change (UNFCCC) for prior consideration in getting carbon credits, some of which have a capacity of 20 megawatts, the UNFCCC website showed.
Prior consideration is the first step for accreditation toward the U.N.’s Clean Development Mechanism that allows developing countries to earn tradeable carbon credits for emissions from clean-energy projects.
Bernhard Seliger, a messenger for North Korean officials on these projects, said the United Nations uploaded the information on Thursday after he submitted related forms on behalf of the North Korean government’s carbon trade division in late February.
“I have no idea when the U.N. makes a decision… North Korea has to finish the power plants, which up to now are only half-finished dams,” Seliger, Hanns Seidel Foundation’s representative in South Korea, told Reuters via email.
Analysts questioned the demand for carbon credits from North Korea, concerned the money might be siphoned off to nuclear arms or other military projects.
North Korea hopes to earn much-needed hard currency by selling UN-backed carbon offsets from a series of hydro-power projects, as the country faces sanctions over its nuclear weapons programme.
If approved and registered by the UN, these would be the first projects for North Korea under a scheme called the Clean Development Mechanism (CDM). This allows developing countries to earn tradeable carbon credits for emissions reductions from clean-energy projects.
Some analysts questioned the demand for carbon credits from North Korea, with fears the money might be siphoned off to nuclear arms or other military projects.
The government has asked the Hanns Seidel Foundation of Germany, which focuses on humanitarian issues, to act as a go-between by working with UN-approved verification agency TUV Nord.
According to Bernhard Seliger, the foundation’s representative in South Korea, North Korea is initially looking at trying to get approval for three hydro power plants of 7-8 megawatts (MW).
Seliger visited the three hydro-plant construction sites in the north-east corner of the country in January.
In a statement, TUV Nord confirmed the foundation had engaged their services.
“In this respect, TUV Nord intends to verify hydropower dams in North Korea once pre-registered with United Nations framework conventions on climate change [UNFCCC] via the Beijing branch of its Chinese subsidiary TUV Nord Guangzhou,” it said.
If registered, the plants could yield millions of euros over several years.
Beijing-based lawyer Tom Luckock, who specialises in projects that curb greenhouse gas emissions, estimated that an 8 MW hydro plant could yield about 23,000 UN offsets a year.
The offsets, called Certified Emissions Reductions (CERs), are generated from registered CDM projects, such as wind farms, that are rewarded for reducing greenhouse gas emissions.
The offsets currently trade at nearly €12 (£10) each and are bought by governments in rich nations that need to meet UN emissions reduction targets.
Europe is the biggest buyer, with large polluting firms allowed to buy the offsets to meet a portion of their emissions reduction targets under the EU’s emissions trading scheme.
“Finding ways to secure foreign currency is the priority for North Korea, which is linked to everything from food to raw material imports to boost reduced productivity,” said Cho Myung-chul, a senior researcher at the Korea Institute for International Economic Policy.
Seliger said North Korea, which signed the UN’s Kyoto Protocol climate pact in 2005, was also interested in biomass power generation projects under the CDM.
The UN-approved national agency that assesses and approves CDM projects in North Korea was not available for comment.
Questions remained on demand for North Korean CERs.
“Even if they open up, who in the world wants to pay for North Korea that is blamed for its nuclear weapons programme?” said Choi Soo-young, a senior researcher at the Korea Institute for National Unification.
Cho said the UN needed to prevent outside cash going into its nuclear development activities, while Luckock, of global law firm Norton Rose, said: “Their limited access to hard currency has to be a concern for buyers – the damages clauses will carry limited weight without some security there.”
Another challenge is that North Korea would have to make public its energy consumption and generation data and disclose information on the amount of energy linked to the hydro project.
“Annual inspection, constant measurement and energy flow posting on the [UNFCC] website – all these things are new for North Korea,” Seliger said.
“We are talking about eight power plants, with the smallest size about 7.5 megawatts. These are not big projects but small or medium-sized projects,” Bernhard Seliger told AFP.
None has yet been completed, he said.
“I saw some (construction) sites in South Hamkyong province but that’s not all. There are other plants in other regions,” Seliger said, adding that some of the projects are led by the UN Development Programme.
The Hanns Seidel Foundation has been working since 2003 to build the North’s development capacity, and in 2008 organised a seminar on carbon trading for Pyongyang officials at their request.
The tradeable credits, called Certified Emissions Reductions, are awarded for approved clean-energy projects such as hydropower plants or wind farms.
Big polluters elsewhere in the world can buy them as part of their efforts to cut emissions.
Seliger said his foundation is helping the North to prepare for the auditing process required to join the UN carbon credit trading system known as the Clean Development Mechanism.
“One good thing about this project is that it is very transparent, involving monitoring and auditing on an annual basis… I think it is very good for North Korea to participate in such an international regime,” said Seliger.
An official at a South Korean state agency, the Korea Energy Management Corp, said registration would take at least a year or two and it was unclear how much the North would be able to earn if approved.
The official, who declined to be identified, said a typical eight-megawatt hydropower plant could yield about 19,500 carbon credits each year, each of which was currently traded at 12 euros in global markets.
This would amount to around $327,000 a year.
But some buyers may shun the communist state, given its history of nuclear and missile development which has led to international sanctions.
“Government buyers will certainly shy away from dealing with the North,” said Koo Jung-Han, a researcher at the Korea Institute of Finance.
“But private companies have few reasons not to buy credits from the North as long as it can offer a competitively low price. However, the big question is whether the North will be able to build the plants without outside financiers.”
Koo said that countries hoping to buy carbon credits from upcoming overseas projects often encourage investment in the ventures by their own finance companies.
“But what kind of financial companies will take a plunge in projects in such a volatile, politically risky country like North Korea?”
The North suffers persistent power shortages even in the showpiece capital Pyongyang.
Many rural areas receive power only during key agricultural seasons, and must rely for the rest of the year on alternative fuels, according to a recent policy paper published by the Nautilus Institute think-tank.
I am not sure which hydro power stations the DPRK is planning to submit to the UN, but many have been been highlighted in North Korean “media” in recent years:
Kumya River Dam A dam is being constructed in Kumya County, South Hamgyong Province, to provide electrical power. Kim Jong-il last visited in August 4, 2010. It is just one of several dams under currently under construction in the DPRK.
Here is a satellite image of the Kumya dam’s construction (Google Earth: 11/25/2008, 39.574232°, 127.104736°)
This new reservoir will flood the locations of three villages (리): Ryongnam-ri (룡남리), Ryongsang-ri (룡상리), and Ryongchon-ri (룡천리).
Estimates of the reservoir size are made by me, but it is fairly obvious where the North Korean engineers expect the reservoir to flood because they have already relocated the villages from their former locations in the flood zone.
Kumjingang River Power Stations
Beginning in 2000, the DPRK has constructed three power stations on the Kumjin River (금진강) in South Hamgyong Province. The first was the Kumjingang Power Station (금진강발전소). The second was the Kumjingang Hungbong Youth Power Station (금진강흥봉청년발전소). The third was the Kumjingang Kuchang Youth Power Station (금진강구창청년발전소). All three are pictured below on Google Earth:
It does not appear that these projects have resulted in dislocated villages.
Wonsan Youth Power Stations
Below is a satellite image of the Wonsan Youth Power Stations No’s. 1-4 (원산청년발전소). These projects required the construction of both the Kuryong Reservoir (구룡저수지) and an appx 8.5 mile (13.69km) tunnel to link the hydro power stations with their power source. The inaugural ceremony for these facilities was on January 10, 2009.
The construction of the Kuryong Reservoir resulted in the dislocation of three villages: Kuryong-ri (구룡리), Konja-ri (건자리), and Haerang-ri (해랑리).
Orangchon Power Station No. 1
Kim Jong-il offered guidance at the Orangchon Power Station (어랑천1호발전소) in February 2007. This facility will probably not be submitted to the UN for scrutiny because it lies just outside the security perimeter of what human rights groups assert is Kwan-li-so No. 16.
Anbyon Youth Power Stations No’s 1 & 2
The Anbyon Power Stations (안변청년1-2호발전소, 38.954400°, 127.538912°) are powered by waters from the Imnam Reservoir (임남저수지) via an underground tunnel nearly 45km in length. Much more here.
Ryesonggang Youth Power Stations 1-6
Some of the Ryesonggang Youth Power Stations (례성강청년1-6호발전소, 38.367696°, 126.781096°) appear to be under construction in North Hwanghae Province. The North Korean “media” has only broadcast images of the Ryesonggang Power Stations 1, 2, and 6 (all completed), so I presume that power stations 3, 4, and 5 are too new to show up on available Google Earth Satellite imagery. Below I post images of the distance between power stations 1 and 6 as well as close-ups of both facilities.
Power Station No. 1 was completed in 2007 and most recently received media attention in South Korea in September 2009 when the DPRK released a massive amount of water from its dam (Hwanggang Dam), causing floods in South Korea that killed six people. An estimated 40,000,000 short tons (36,000,000 t) of water was dumped during the flood, causing the water level at the border of Gyeonggi-do to leap from 7.5 feet (2.3 m) to 15.1 feet (4.6 m).
Power Station No. 2 (38.324008°, 126.673366°) has been completed, but it is too new to appear on Google Earth satellite imagery. I have drawn it on Google Earth below:
Construction of Power Station No. 2 resulted in the dislocation of approximately 27 houses, but I have not been able to determine if any other villages were relocated due to construction of the other facilities.
Paektusan Songun Youth Power Stations
The North Korean media has also done a lot of advertising for the Paektusan Songun Youth Power Stations (백두산선군청년발전소) in Paekam County, Ryanggang Province (41.716931°, 128.786163°).
These dams have resulted in the dislocation of two small communities as well as the severing of the old railway lines that connected Unhung, Kilju and Paekam with Musan. Maybe the railway lines have been moved to accommodate the new dams, but it is also unclear if these line were in use to begin with.
Pukchang Ryongsan Power Station
Up until recently I believed the Pukchang Ryongsan Power Station (북창룡산발전소, 39.596238°, 126.266478°) was a large-scale river-straightening project, but according to recent KCTV footage (which I posted to Youtube here) it is in fact a hydro power station. Work on this project began sometime around the spring 2002 (as best I can tell).
Huichon Youth Power Stations
The Huichon Youth Power Stations No. 1 & 2 have received the most attention in the North Korean media. I recently located them and will post something soon.
Since the DPRK will likely be subjecting several of these (or other) power plants to international scrutiny, I look forward to seeing that data published. KCNA is short on details and the disclosed information would facilitate more accurate assessments of the DPRK’s domestic hydro-power generating capacities.
A reader writes in with the following comments:
I would like to share some comments on the potential CDM projects in north Korea as i have been working on this field for many years now.
Concerning existing hydropower plants:
To be eligible to a CDM project, one of the first criteria is the additionality of the project. You have to prove (the rules are very stricts) that the project would not have been launched without the consideration of the revenues from the reselling of the CERs.
So the Dams that have already been buit are not eligible.
Concerning hydropower plants that are being implemented:
The first step of a CDM project is to notify to the UNFCCC secretariat and to Designated National Authority (in this case the Secretariat of the National Coordinating Committee of Democratic People’s Republic of Korea for Environment) that you are seeking to establish your project as a CDM project.
Up to now, no such notification has been received by UNFCCC so it would be quiet difficult for projects being implemented to ask for the CDM status (i mean nearly impossible).
Some facts concerning future hydropower projects:
From the day you send the notification that you are seeking the CDM status to the day you are actually given the status, it takes in average 2 to 3 years (they would have to build the plants during this period)
Then it can be at least another year before you receive the CERs.
The price of 12 euro for a CER is for secondary market. The price for primary CER (directly sold by the producer) would be much less than 8 euro.
The figure of 20 000 CERs/year is completely unpredictable for the moment, here is a simplification of the calculation:
One CER is equal to one tonne of CO2 equivalent that would be avoided by producing clean electricity. For example when you produce 1 MW electricity from coal, the process releases X tonnes of CO2 in the atmosphere but when you produce 1 MW from a hydropower plant, you do not release CO2.
In order to calculate what the CDM project would be able to claim, we would have to know the CO2 emission factor of the North Korean grid and then multiply it by the amount of MWh produced by the CDM project.
If most of the electricity produced these days in North Korea already comes from hydropower plants, then the national emission factor will be low and the CDM project will not avoid a lot of CO2 emission (and so not earn a lot of €)
Without the capacity of the future project and the national emission factor, it is impossible to estimate the amount of CERs the project could generate.
The CDM status seems quiet unrealistic to obtain for North Korean projects but other international agreements are discussed these days and their outcome may be more adapted.
Nuclear-armed but cash-starved North Korea has expressed interest in joining the world carbon market in an apparent bid to earn precious hard currency and avoid international sanctions, an expert told RFA.
But the secretive Kim Jong Il regime has to disclose critical information, such as energy consumption data as well as methods by which it derives energy, to be eligible for funding under the United Nations’ Clean Development Mechanism (CDM), said the North Korea expert, speaking on condition of anonymity.
The CDM is aimed at encouraging companies or organizations in the developed world to invest in carbon dioxide emissions-saving projects in developing countries.
In return for funding and technology transfer, investors receive carbon credits, which can then either be traded on carbon markets or used to reduce their own emissions tally if they are subject to a domestic cap.
The Kyoto Protocol set emission caps for 38 countries through 2012, establishing the CDM as a worldwide carbon market. It is a cornerstone of the group’s efforts to tackle global warming.
The North Korea expert told RFA on Jan. 13 that Pyongyang intended to apply for funding via the CDM and that the regime might list its proposed hydro-electricity power projects under the U.N. mechanism.
UN refrains from comment
When contacted on the North Korea move, the U.N. Framework Convention on Climate Change (UNFCC), the secretariat charged with implementing the global environmental treaty to stabilize greenhouse gas concentrations, said it would refrain from commenting on individual country projects.
The North Korea expert estimated that one ton of carbon dioxide would trade for about U.S. $26 dollars and if a hydro-electric power project was registered under the CDM, depending on the carbon credit bid price, about U.S. $1 million dollars could be earned annually.
A hydro project registered under the CDM would need to be evaluated by U.N. inspectors for it to qualify for carbon credits. Usually, it would be evaluated continuously for about 14 years.
Details, including the amount of energy linked to the hydro project and potential reduction of greenhouse gas emissions, would have to be submitted.
North Korea has been mostly reluctant to share information about its energy generation activities.
According to the expert, North Korea has recently displayed “great interest” in the possibility of operating hydro-electric power stations to alleviate its domestic energy shortages and to acquire “carbon credits” that it could, in turn, sell on the international carbon market.
As North Korea’s economic crisis worsens, Pyongyang is seeking ways to earn hard currency following a failed currency reform and due to sanctions imposed by the international community over its nuclear and missile developments and provocations targeting South Korea.
The interest in the CDM is likely to be part of this search.
The North Korea expert also said that earning hard currency through “carbon credits” would not be subject to sanctions imposed on Pyongyang under UN Security Council resolutions, and that any North Korea’s application for participation under the CDM “may stand a chance.”
“For North Korea, this could be an opportunity to earn hard currency without engaging in illegal armament sales, while operating an electric power station in transparent fashion, and accepting strict monitoring by the UN, and abiding by applicable international standards.”
The United States has been pressing China to use its influence to persuade North Korea regime to end recent provocations and return to disarmament talks involving the three countries and South Korea, Russia and Japan.
The six-party nuclear talks were last held in 2008. The impoverished North has been seeking a restart to the nuclear negotiations, which propose to reward its gradual nuclear disarmament with phased infusions of economic aid.
In a bid to renew dialogue and ease chances of conflict, South Korea recently proposed holding a preliminary meeting with North Korea on Feb. 11 to prepare for high-level defense talks. On Friday, the North suggested parliamentary talks between the two sides.
Read the full story here:
North Korea Eyes Carbon Market Radio Free Asia 1/29/2011
Daily NK has learned that the authorities are considering closing down the iconic Pyongyang CHP Plant, which has supplied much of Pyongyang’s electricity for more than 50 years.
A Pyongyang source told the Daily NK on the 30th, “There is news that Pyongyang CHP is being demolished due to the environmental pollution.”
The plant, which is located in the Pyongcheon region of the North Korean capital, first went online in 1961 with a capacity of 200MW. It was expanded to 400MW in 1967, and currently covers a 400,000m2 area of city real estate. The plant was once the only power generating facility in the city.
However, it is now highly inefficient by modern standards and suffers regular equipment failures. The amount of coal consumed by its combined heat and power system is also both enormous, to the extent that it could easily be more effective to export the coal and buy power with the money, and enormously polluting to both the local air and watercourses.
Therefore, the authorities are reportedly hoping to replace the power generated by Pyongyang CHP with that produced by the recently completed Heechon Power Station. However, the clear flaw is that while the capacity of Heechon is sufficient to replace Pyongyang CHP production on paper, there are serious questions over its potential to replace thermal power production given the problems North Korea has gathering enough water for hydroelectricity at certain times of year.
The source said, “Pyongyang residents are worried that ‘If the water dries up in Jagang Province, then Pyongyang’s electricity will also be cut off.”
However, Pyongyang CHP is not the only thermal power supplier to the city. To power the large apartments near Unification Street, the 200MW East Pyongyang CHP was built by a Russian company, Tekhnopromexport, in the early 1990s, going online in 1993. In 2008 when the same plant underwent modernization, the official propaganda declared, “Now, just like Germany, the U.S. and Japan we are equipped with a world class power plant.”
On the 28th of last month, the North Korean media released news of work to further improve the second Pyongyang plant, although it is unclear what this means in reality.
Read the full story here:
Iconic Pyongyang Power Plant Could Go
Choi Song Min
Pictured above: A satellite image of the construction of the Huichon Power Station No. 2
UPDATE 1 (2012-4-6): According to KCNA the plant is operational:
Huichon Power Station Goes Operational
Pyongyang, April 6 (KCNA) — The construction of the Huichon Power Station has been completed in the DPRK.
The completion makes it possible to more satisfactorily settle the shortage of electricity in Pyongyang, protect cultivated land and residential areas along the River Chongchon from flood and ensure an ample supply of industrial water to the industrial establishments in Huichon and Namhung areas.
The builders finished the construction of the power station in a matter of three years though it would have taken more than a decade at normal pace.
Inaugural ceremonies were held at Huichon Power Station Nos. 1 and 2 on Thursday.
Present there were Kim Yong Nam, Choe Yong Rim, Kim Yong Chun, Choe Thae Bok, Thae Jong Su and others.
A joint congratulatory message sent by the Central Committee and Central Military Commission of the Workers’ Party of Korea to the soldier-builders, members of the shock brigades, officials and helpers who distinguished themselves in the construction of the power station was conveyed there.
The message said that the builders, who devotedly carried out the behests of President Kim Il Sung and leader Kim Jong Il and demonstrated before the whole world that Korea does what it is determined to do, are true descendants of the President, soldiers and disciples faithful to Kim Jong Il and heroes of the times and patriots to be respected by the whole country.
The Party will always remember the heroic feats performed by the builders who erected a gigantic structure for the country’s prosperity and its people’s happiness, it noted.
It highly praised them for successfully building a giant power base in Huichon in a short span of time and thereby making a great contribution to settling the shortage of electricity in the country and instilling conviction of sure victory and hope into all people.
Choe Yong Rim, member of the Presidium of the Political Bureau of the WPK Central Committee and premier of the Cabinet, made addresses at the ceremonies.
He said that the Huichon Power Station is a monumental structure built in the Songun era thanks to the wise leadership provided by Kim Jong Il to build a thriving socialist nation on this land.
Referring to the achievements made in the construction, Choe noted these are the brilliant fruition of the wise guidance and meticulous care of Kim Jong Il and the dear respected Kim Jong Un who unrolled a grandiose plan for the building of the power station and energetically led the drive for its completion.
Speeches were made there.
The participants looked round Power Station Nos. 1 and 2.
Yesterday, Kim Young Nam, the head of the Standing Committee of the Supreme People’s Assembly, and Choi Yong Rim, North Korea’s Prime Minister, were among the regime elite figures present at a ceremony at Heechon Power Plant in Jagang Province.
Built to provide power to downtown Pyongyang, the hydroelectric facility is meant to be one of North Korea’s marquee engineering projects slated to go into operation in 2012, and as such was the site of four of Kim Jong Il’s trademark onsite guidance inspections in 2010 alone and five in total.
“Thanks to the struggle of construction workers including military personnel, the prospect of finishing this project before 2012 has opened up. Before the 100th anniversary of the birth of the Supreme Leader, the entire Party, military and the people should battle to get this power plant construction finished,” Kim reportedly said on his fourth such visit in December, 2010.
Designed to generate 300,000kw, the plant now becomes the largest of all North Korea’s ‘operational’ hydroelectric dams. According to the propaganda that accompanied the construction every step of the way, the electricity generated by Heechon is supposed to make big inroads into the country’s power generation shortfall.
However, according to one inside source, the determination to declare the project complete by April 2012 hides a less impressive reality. In truth, the electricity transmission facilities are apparently incomplete, while problems gathering enough water behind the dam mean that the production of electricity for civilian consumption is still some way off.
One inside source explained, “They already had a ceremony for Heechon last September, but electricity has still not been produced yet because of the transmission facilities. And even when that is finished, they cannot fill up the reservoir behind the dam so generation will still be very difficult.”
“Experts in North Korea say that getting enough water for the dam is harder than building the thing,” the source went on. “Gathering enough water to spin the turbines at Heechon looks like it will take a while.”
ORIGINAL POST (2012-1-23): Huichon Power Station on Google Earth
The Huichon Power Stations 1 & 2 (희천1호발전소, 희천2호발전소) are too new to appear on Google Earth satellite imagery. I have, however, mapped them out by hand on the old imagery to give a better idea of their locations. I have also tagged them on Wikimapia.
In the picture above you can see that the Huichon Power Station’s headwaters begin in Ryongrim County (룡림군) where the newly-built Ryongrim Dam holds back a large reservoir. This reservoir drains through a tunnel [in orange in the image above] approximately 30 km long (18.5 miles) and empties through the Huichon Power Station No. 1 in Tongsin County into the Chongchon River. The river flows south where it crosses into Huichon County and builds up behind a second reservoir. From this second reservoir the water drains out directly through the Huichon Power Station No. 2.
When Kim Jong-il gave guidance visits to this site he often stood on the eastern side of the dam which offers the view captured in the image above (R).
The Huichon Power Station No. 1 itself is located in Tongsin County aproximately 30km due south from the Ryongrim Dam (40.273568°, 126.526565°).
In the satellite image above I have drawn the physical location of the power plant. Next to and below it I have posted images from KCTV dated 2011-3-10.
The Huichon Power Station No. 2 lies on the Chongchon River just south of the border with Tongsin.
This project might have resulted in the destruction of one village, Kyonghung-ri (경흥리), in Tongsin County, but this is impossible to confirm without better satellite imagery.
So where will the electricity produced at these new power stations be consumed? On January 21, 2012, Rodong Sinmun reported the answer:
Like the warm hands of leader Kim Jong Il, the transmission lines from the Huichon Power Station are now almost stretching out for the capital city of Pyongyang.
To meet the great expectations of Kim Jong Il who entrusted them to such a gigantic work, the builders of the power station have gained great successes.
They have erected big dams, cut waterway tunnels and carried out other bulky tasks that were said to take ten years and more; and in the wake of trial operation of generating equipment at the Huichon Power Station No. 1, they successfully assembled the hulks of generators at the Huichon Power Station No. 2.
These successes had an immediate chain reaction on the scaffold workers laying transmission cables from the power station to the capital city.
They have already laid transmission cables in scores of kilometer long section, while preceding the construction of pylons in two months.
By their heroic labor, the excavation work to lay the foundation for the pylons have been wound up, too.
Now, their job is concrete tamping of the pylons’ foundations. By introducing new work methods they are hastening their work of erecting pylons as firm as would stand for many hundred years.
Now that power lines have been lain in major sections, they have buckled down to laying the power lines in the remaining sections and erecting transformer substations to reach the capital city as early as possible.
It won’t be long before we can see the power lines reach Pyongyang amid the cheers of the citizens.
Since I have mapped out a significant portion of the North Korean electricity grid on Google Earth, I can point out an area where I believe these power cables are being constructed. In the image below, dated 2010-9-14, I have connected the power cable tower construction sites with a yellow line:
In the image above there are approximately 146 power cable towers under construction between Pakchon (North Pyongan-top of image) and Sunan (Pyongyang-bottom of image). Of course, to be certain that these are the specific lines connecting Huichon and Pyongyang, I will need more imagery.
Since Kim Jong-un’s first election as the vice-chairman of the Korean Workers’ Party Central Military Commission (CMC) on September 28, 2010, Kim Jong-un was reported to have made 33 accompanied onsite inspections with Kim Jong-il and a total of 61 visits at industrial sites.
Kim Jong-un’s “economic learning” began while accompanying his late father Kim Jong-il on onsite inspections. Even when Kim Jong-il was alive, Kim Jong-un was most likely to have made preliminary visits to these industrial sites for a closer assessment as a part of his duty as the vice-chairman of the CMC.
The significance of the recent visits mainly lie with inspections to the Huichon Power Stations (located in Jagang Province) equipped with 300,000 kW of power generation capacity. Huichon Power Station was an important national strategic project which was often emphasized by Kim Jong-il, “The construction of the power plant must be completed before the centennial birthday of the Great Leader (Kim Il-sung) with great efforts from the entire party, military and the people.”
The electricity produced at the Huichon Power Station is likely to be distributed primarily in the Pyongyang area around the two national holidays, the Day of the Shining Star (Kim Jong-il’s birthday) and the Day of the Sun (Kim Il-sung’s birthday). Currently, power line constructions are still underway in Pyongyang.
At Huichon, constructions of additional terraced power plants are under planning using the currents from the Yangtze and Cheongcheo Rivers. The electricity produced from these plants is likely to be distributed to the industrial areas in Jagang Province, which is central to the machinery and national defense industries.
Important policy implications can be found from Kim Jong-un’s past accompaniment to the Huichon Ryonha General Machinery Plant with Kim Jong-il. This plant is currently emphasized as Kim Jong-un’s accomplishment and revered as, “the industrial revolution of the new era,” and a “site of CNC (Computer Numerical Control) breakthrough.” In addition, Kim Jong-un’s economic leadership is acclaimed for placing prominence on the state-of-the-art technology and “knowledge-based economy.”
Kim Jong-il visited the Huichon Ryonha General Machinery Plant on October 28, 2011 with Kim Jong-un and inspected the CNC assembly line, CNC processing plant, and CNC machineries. He stressed, “Modernization must be promoted in all sectors and levels founded on the state-of-the-art technology. The achievements in the CNC technology should serve as the stepping stone to move forward toward a higher level of science and technology.”
Similarly on October 27, 2011, Kim Jong-il visited the Yangtze River Machinery Plant* with the younger Kim and stressed, “Powerful economic nation that we are seeking is knowledge-based economy which is only possible when CNC technology and automation is realized that can create material wealth through little resources, efforts, and energy.”
The “knowledge-based economy” will likely become the trademark of Kim Jong-un and esteemed as following the “teachings of Kim Jong-il.” Kim Jong-un’s recent industrial site visits were concentrated on the cutting edge production facilities equipped with modernized and automated production processes.
Many of the residents of luxury apartments in Pyongyang are leaving their homes for the heated homes of relatives or other warmer locations.
An inside source who visited Pyongyang at the end of last month said in a phone interview with the Daily NK today, “People previously had no supplies of water so didn’t have drinking water and could not go to the bathroom without difficulty, but now that there are heating problems too the people are inevitably leaving their homes. This year, many people are locking their homes and leaving for warmer places.”
The source said, “When I went to Pyongyang just three years ago, the people still stayed in their apartments even without heat, but now half of them are gone, they went to East Pyongyang where the pre-1980s homes are heated with charcoal briquettes.”
The source added, “Even until last year, the residents in these apartments spent the whole winter season there with cotton blankets on the floor all day long, filling pint bottles with hot water to warm their blankets when they slept; however, as the situation has gotten worse this year whole families cannot take any more and have chosen to leave their homes behind.”
The 20-40 storey apartments on Gwangbok and Tongil Streets, which are boasted of by the North Korean authorities for their modernity, are among those falling into dilapidation.
The source explained, “If the rooms had just enough lukewarm water that they wouldn’t freeze we could live, but now they are not even able to do that. Nobody knows when heat will come.”
Among many North Korean people, the situation is such that the letter ‘ㄹ’ has come to be ridiculed, with people saying that they suffer from a particular lack of words that have the letter ‘ㄹ’ in them, for example, water (‘물’), fire/electric (‘불’), and rice (‘쌀’).
North Korea’s capital faces its worst electricity shortages in years just as a new leadership takes power in the impoverished state and pushes ahead with lavish building projects to celebrate the centenary of its founder’s birth.
The Pyongyang-based diplomat, who asked not to be named, said the city of 3 million and home to the leadership elite, has seen daily power supplies almost evaporate as freezing winter temperatures bite.
“Embassies and others with generators are using them most of the time to compensate both for poor quality and cuts, and I can tell you that power problems are a main issue of discussion,” said the diplomat, one of a small number of foreigners allowed to live in the country.
“We certainly assess that there is more darkness on the streets and in the residential blocks in the evening than before/during the mourning period (for Kim Jong-il).”
The young Kim Jong-un has been declared the country’s new “supreme leader” following the death of his father Kim Jong-il in December.
Fuel shortages have long been a chronic problem in North Korea which is heavily sanctioned by the outside world for a series of nuclear and missile tests.
Temperatures in the capital on Wednesday hit -19 Celsius (-2 Fahrenheit).
This winter’s outages have coincided with Pyongyang’s building spree to mark the 100th anniversary this year of the birth of founder Kim Il-sung — the current leader’s grandfather — including building 100,000 new homes in the capital.
The North is also struggling with chronic food shortages, with United Nations’ food agencies estimating nearly 3 million people will need food assistance this year.
Read the full stories here:
No Electricity, No Water, No Patience Daily NK
Choi Song Min
North Korea Power Cut: Pyongyang Diplomat Says Capital Faces Worst Electricity Shortages In Years Reuters
Pictured Above: The DPRK’s two most famous waterways are the Paekma-Cholsan Waterway (see here and here) and the Kaechon-Lake Thaesong Waterway. A third waterway in the Miru Plain is too recent to appear on Google Earth.
Waterway to Be Built in South Hwanghae Province, DPRK
Pyongyang, January 26 (KCNA) — A gravity-fed waterway will be built in South Hwanghae Province.
It is another gigantic nature-remaking project in the era of Songun as part of the far-sighted nature-harnessing plan of leader Kim Jong Il and the dear respected Kim Jong Un.
The completion of the waterway will help sufficiently irrigate tens of thousands of hectares of farmland and tideland-turned rice fields including those in Ongjin, Kangryong, Pyoksong and other several counties to ensure a safe and high yield of grain.
It will also help save tens of thousands of kilowatt of electricity and make a great contribution to the economic development and improvement of people’s living standard by preventing the damage by flood in the area along Jaeryong River.
A ground-breaking ceremony took place in Haeju City on Thursday.
Present there were Choe Yong Rim, Kim Ki Nam and other senior officials and officials of ministries and national institutions, builders and working people.
The gross industrial output value grew 1.2 times for twenty days of January this year as against the same period last year.
This is the result of the high-pitched drive waged by all the workers of the country since the first day of this year after receiving with excitement the joint calls of the Central Committee and the Central Military Commission of the Workers’ Party of Korea, the joint New Year editorial for this year and the letter of the working people in South Hamgyong Province.
In the period, the Ministry of Light Industry increased the production 1.4 times and the Ministry of Food and Daily Necessities sharply boosted the production.
Thermal and hydropower stations have increased the ratio of operating the generating equipment.
Much effort is being concentrated on supplying coal to the thermal power plants and chemical and metal plants and developing more coal beds.
The Ministry of Coal Industry produced 12,000 more tons of coal than planned for the 20 days.
Iron mills and steelworks also increased the production.
The freight transport volume increased by 12 percent from the same period last year.
Innovations were made in the production of vinalon and fertilizer by the industrial establishments in the field of chemical industry and in the production of custom built equipment and mining machines by the industrial enterprises of the field of machine industry.
The forestry stations and pit wood stations increased the timber production.
Progress has been reported on a daily basis from the important projects including the building of apartments in Mansudae areas and the Paektusan Songun Youth Power Station.
For the uninitiated, this is about as close as the DPRK gets to releasing economic statistics. Note there are no base numbers–only [some] % increases. Also, despite the measure being officially named “output value”, it is really just a claim of increased physical production. There is no value (prices) or mention of “services” included in these measures.
Unfortunately without more solid numbers, and the proclivity to ascribe productivity gains to effective propaganda, these reports cannot be taken seriously.
Although we all talk about the DPRK’s GDP and per capita income as if the numbers are solid, the reality is quite the opposite. In addition to the general lack of information, there are all sorts of methodological problems with assessing the value of the DPRK’s economy. Here are some helpful sources if you want to learn more:
- (JSTOR) “Soviet Industrial Growth”, Source: Science, New Series, Vol. 130, No. 3370 (Jul. 31, 1959), pp. 252-255
-(JSTOR) “Industrial Growth in the Soviet Union”, The American Economic Review , Vol. 48, No. 2, Papers and Proceedings of the Seventieth Annual Meeting of the American Economic Association (May, 1958), pp. 398-411
-(JSTOR) Some Observations on Soviet Industrial Growth”, The American Economic Review , Vol. 47, No. 2, Papers and Proceedings of the Sixty-eighth Annual Meeting of the American Economic Association (May, 1957), pp. 618-630