Energy tech university becomes major headache as KEPCO's losses swell

Students attend an admissions ceremony at the Korea Institute of Energy Technology (Kentech) in Naju, South Jeolla Province, March 2. Yonhap

By Lee Kyung-min

Korea Institute of Energy Technology (Kentech), a much-criticized technology university associated with Korea Electric Power Corp. (KEPCO), is emerging as a major headache for the state-run power firm, whose record-high losses will mean that it won't be able to finance the operation of the higher educational institution in need of about 1.6 trillion won ($1.2 billion) over the next few years, according to critics, Monday.

They say that the opening of the ill-conceived and ill-prepared university in Naju, South Jeolla Province, was rushed solely because it was a campaign pledge that was promised by former President Moon Jae-in.

Fueling the simmering and seemingly endless criticism is the spike in operating losses by the state-run energy firm over the past year, certain to increase in the coming months due to elevated global energy prices brought on and amplified by geopolitical volatilities.

KEPCO suffered 7.78 trillion won in operating losses in the first three months of this year. This figure has already far exceeded last year's operating loss of 5.86 trillion won. Some market watchers say the loss could widen to 30 trillion won, depending on the country's energy pricing policy.

Also concerning KEPCO is the finance ministry's request to submit a plan by the end of this month to improve its financials. Failure to fortify its balance sheet, including a significant reduction in debt will lead to the dismissal of its CEO Cheong Seung-il.

Any further push to spend taxpayers' money to run the university will sour public opinion further, since the university by law is designed to receive grants from the surcharges in electricity rates. Korea raised key energy costs last year and this year, a politically delayed decision under the Moon administration to be followed by a few more rises throughout next year. Earlier and more intense heatwaves in the summer will translate into higher energy prices, sparking an immense pushback against the politically railroaded plan.

“It was a plan that was neither viable nor desirable from the get-go,” Korean Association of Private University Presidents Secretary General Hwang In-sung said.

How the university would be managed efficiently and competently in the long term, he said, was a question raised long before KEPCO's staggering losses and one that will become far harder to answer given the rapid rise in the costs of living.

“Many people are already feeling the pinch of surging living expenses, including energy prices, due to inflation. No one will be able to competently rationalize spending taxpayers' hard-earned money on an ill-conceived university, which was set up only to advance the political agenda of the Moon administration.”

When contacted by The Korea Times, KEPCO declined to comment. Kentech was also unavailable for comment.