Original Korean article: ZDNet Korea
The government has indicated that the reintegration of five power generation public enterprises that were dispersed in 2001 to encourage mutual competition is a necessary restructuring for a major transition to renewable energy.
Minister Kim Sung-hwan of the Ministry of Climate, Energy and Environment made this position clear on the 4th at a meeting on the integration of the five Gencos held at Korea Electric Power Corporation's South Seoul headquarters.
According to the public institution function reform implementation plan announced the previous day, the government plans to integrate Korea South-East Power, Korea Midland Power, Korea Western Power, Korea Southern Power, and Korea East-West Power into Korea Generation, a 100 percent subsidiary of Korea Electric Power Corporation.
Minister Kim stated, "During the consulting process, multiple options were reviewed, including integration into a single company, division into two or three entities, and establishing separate companies by power generation source such as renewable energy and coal." He continued, "In a situation where 52 coal power plants are being phased out sequentially, the integrated Genco should be viewed as operating as an unified institution for effective transition rather than as a market-dominant developer in the energy sector."
He added, "If coal power generation were being maintained, the term market-dominant developer might be appropriate, but that is not the current situation. Both the presidents of the five Gencos and labor unions agreed that unified integration to proceed with transition in a coordinated manner is preferable, and this was prioritized. I ask for your understanding that avoiding integration was not an option given these circumstances."
At the meeting, the Ministry of Climate, Energy and Environment stated that the headquarters location of Korea Generation has not yet been determined. The government is reviewing either the current locations of the five Gencos or a new third location, and the decision will be made in connection with the second public institution relocation plan. The government will consider the location of major power utilities, impacts of just transition, and working and residential conditions for employees, and will conduct consultations with labor, management, government, and the Regional Decentralization Committee in this process.
Minister Kim responded, "Since specific measures for the second public institution relocation plan are expected to be announced in the fourth quarter, I anticipate that we should make a decision together taking this timing into account."
At the meeting, the presidents of the five Gencos and unions requested sufficient business volume allocation for Korea Generation to lead renewable energy transition, along with employment security guarantees and sufficient labor-management consultation during the establishment of the integrated entity.
On this day, Choi Chul-ho, chairman of the Korean Power Industry Labor Union Federation, stated, "Of the 1.8 GW of offshore wind auction volume in the first half of this year, only 400 MW was allocated as public-led projects, and only one public-led project of 160 MW was actually selected. If the integrated Genco is to be responsible for energy transition, it must first be given projects it can actually carry out." He emphasized that the company should not remain in a supplementary investor role for private developers in the market.
Chairman Choi argued, "Particularly in planned-site Power Generation Zones where the government will directly identify and promote sites under the Special Act on the Promotion of Offshore Wind Power Development and Distribution, the government must clearly define the role of the integrated Genco as a key public developer. Furthermore, the government should also review measures to explicitly allocate a certain percentage of future offshore wind auction volume as public-led projects."
The unions also requested special personnel quotas and payroll provisions considering workforce development related to renewable energy operations and new business development initiatives.
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Lee Young-jo, president of Korea Midland Power, stated, "For the integrated entity to be reborn as a world-class energy specialist company alongside energy transition, employee morale must be raised and a work environment where people can work with confidence must be created. The principle of employment stability and security must be maintained without artificial workforce reductions or restructuring, and sufficient consultation should be conducted on matters to which employees are most sensitive, such as work location and personnel transfers, with fair procedures followed."
Moon Yang-taek, power industry policy official at the Ministry of Climate, Energy and Environment, said, "There were requests for upward harmonization of working conditions, but it is premature to say that upward harmonization is possible for all matters. There is some concern that if we insist on upward harmonization, working conditions may be operated differently as in other cases of consolidation and merger. We will not make premature judgments and will discuss the issues raised sufficiently."
KWI developer profile — KEPCO
2 projects in Korea totalling 500 MW. Compiled from the KWI database. Not part of the source article.
Hanlim Offshore Wind
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Southwest Offshore Wind Phase 2
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Project data: KWI database — Electricity Business Licence records, EIA filings (ME2021C006), Electricity Regulatory Commission minutes, and pre-EBL permit filings.
