With budget cuts for research institutions set to begin in earnest next year, energy costs are expected to inevitably increase or remain the same, placing a heavier burden on the overall energy expenses of these institutions.

According to recent reports from the domestic science and technology research scene, state-run research institutes are accepting next year's budget cuts as a foregone conclusion and have reportedly begun formulating plans on how to allocate the budget.

Amidst this, it is reported that the proportion of energy purchases in the total budget is increasing significantly because energy costs, such as electricity and gas, which form the basis of the research, cannot be reduced.


According to a state-run research institute, excluding the gas used as a material in R&D, the cost of purchasing fuels such as electricity and gas for operating equipment currently accounts for about 10% of the total budget.

If the budget is about 100 billion won, the current expenditure on energy purchases is around 10 billion won. However, if next year's budget is cut to the level currently being discussed, which is about 30%, the total budget will increase from 70 billion won to 10 billion won, and energy purchase costs alone will increase from the current 10% to 14%.

Although it appears to be a 4% increase in numbers, the perceived impact on energy purchase costs is low because the overall budget has already been reduced by 30%.The voices from the field say that the increase is even greater. They expressed concern that since energy purchase costs cannot be reduced in this case, budget cuts in other sectors will become even larger.

Furthermore, this is a burden even though energy purchase costs have not increased; if electricity or gas rates are raised in the second half of this year or next year, the burden of energy purchase costs is expected to increase even further.

Electricity rates have risen by nearly 40% over five rounds from last year to this year, and it is reported that discussions on raising rates are underway as the need for a certain level of increase in the second half of this year has been raised due to the financial crisis caused by the increase in KEPCO's debt.

Amidst this, international crude oil prices have also recently been rising, leading to an increasing number of factors driving up electricity rates.

If electricity rates are also raised, the burden of energy purchases for research institutions is expected to increase even further.

An official from the research field stated, "The current atmosphere in the research sector is becoming subdued due to the impact of budget cuts and the increasing burden of energy purchases. We hope that the government will implement appropriate policies regarding budget allocation and financial support to ensure the smooth progress of research in the field, rather than blindly resorting to budget cuts."