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KEPCO to export power grid tech, reduce gas use to achieve sustainable growth
Korea Electric Power Corp. (KEPCO) CEO Kim Dong-cheol speaks during a press conference in Sejong, Thursday. Courtesy of KEPCO
By Ko Dong-hwan
Korea Electric Power Corp. (KEPCO) will make greater efforts to export its power distribution management and energy technologies to find new growth engines abroad as it tries to improve its deteriorating financial soundness, according to the company's CEO Kim Dong-cheol, Thursday.
Kim also said that to be more responsible for the rising global demand for renewable energy-based electricity, the country's exclusive power distributor will start reducing its reliance on gas-combined power generation businesses which, according to Kim, have been the company's "cash cow."
Kim said that to export KEPCO's self-developed advanced distribution management system (ADMS), the company will first test the system's quality of performance by applying it to the company's domestic business partners, including the Republic of Korea Air Force, until next year.
He added that the company will then introduce upgraded ADMS versions for outbound projects until 2027 and start expanding its overseas markets in 2028.
"Together with our domestic partners that jointly develop ADMS, we'll promote the system alongside its diagnostic sensors, parts and operating systems under a singular package," Kim said in Sejong. "This is part of our renewed objective to broaden our roles from an electricity seller to a developer of new energy technologies."
Kim said that KEPCO will also focus on exporting its eight key businesses – including energy storage system (ESS), advanced metering infrastructure (AMI), substation facility diagnosis, intelligent digital power plant (IDPP) and mountain fire monitoring. He said he will reorganize its global business bureau within this month.
By gradually stepping down its gas-combined power generation businesses, Kim said KEPCO will also do its part in realizing the country's carbon neutrality mission by 2040. But he said he will continue with the company's ongoing businesses that are still in high global demand such as carbon capture utilization storage (CCUS) and coal-fired power generation combined with hydrogen- and ammonia-generated power.
Electricity meters are seen on the wall of a building in Seoul, April 14. KEPCO said it must normalize its electricity rates by raising them within this year. Yonhap
KEPCO's export agenda comes as Kim is determined to stop its reliance on domestic businesses and start betting on overseas markets with new growth engines that are sustainable for the longer term. He criticized his organization's business structure, which has been excessively reliant on revenue from power bills. Out of its total sales of 88.2 trillion won last year, 83 trillion won came from selling electricity.
To diversify KEPCO's growth engines, Kim said he will implement the company's self-developed medium-voltage direct current (MVDC) technologies in local regions that will likely harness a huge volume of renewable energy to broaden the use of direct current (DC) power in the country and save costs incurred from infrastructure and facility maintenance.
In the same vein, he said he will erect more LVDC stations nationwide to supply more DC electricity throughout major power-consuming infrastructures like buildings, data centers and electric vehicle recharging centers.
"Instead of our local consumers having to install power converters and maintain them, KEPCO can directly supply DC to them and save them the hassles," Kim said.
Kim said that to resolve KEPCO's deficit, which has reached 43 trillion won ($32 billion), "normalizing" its electricity charge rates by raising them is inevitable. He, however, declined to reveal how much he plans to raise them, adding it will be announced by the Korean government within this year.
Kim plans to clear the deficit by 2027 by doing "everything the company can." The company has already cut the number of employees at its main office in Naju, South Jeolla Province, by 20 percent, sold assets and adjusted ongoing businesses to minimize costs.
"In the past three years during which the world saw an energy crisis, Italy raised its power rate by 700 percent and so did the United Kingdom, by 174 percent. Yet, some 30 utility companies worldwide went bankrupt. EDF in France, no longer being able to withstand its money-losing business, has returned to total French government ownership."
KEPCO, meanwhile, has "shouldered all burdens itself without raising its power rates," Kim said. For every kilowatt-hour, while Italy charges 335.4 won and the U.K. 504.3 won, Japan 318.3 won and Australia 311.8 won, Korea charges just 149.8 won.
"We were like a seawall protecting the country that imports 93 percent of its energy. But the outcome has snowballed back to us as a fiscal bomb because our power bill revenue kept falling short of our operating costs and bank interest. Last year, we faced near bankruptcy. Now, I urge the government to grant normalization of our power rates."