The government's decision to merge five state-owned power generation companies and two energy resource companies into single entities has sparked intense competition among regions vying to host the unified headquarters. The location of the merged headquarters will determine which regions gain or lose thousands of jobs and substantial economic benefits, prompting existing headquarters locations and regions with historical ties to enter the bidding race.
According to the energy industry on September 27, 2026, the government announced on the 3rd a "Public Institution Function Reform Implementation Plan" and said it would streamline 109 public institutions, representing about 20 percent of all public institutions, reducing the total number from 524 to 415.
In the energy sector, the government decided to integrate the five power generation companies, namely KOEN (Korea South-East Power), KOMIPO (Korea Midland Power), KOWEPO (Korea Western Power), KOSPO (Korea Southern Power), and EWP (Korea East-West Power), into a single legal entity called "Korea Generation" (tentative name), and to merge KNOC and Korea Gas Corporation into "Energy Resources Corporation" (tentative name). However, the location of the unified headquarters was left as a matter for future decision.
Korea Generation will launch as a subsidiary in which Korea Electric Power Corporation (KEPCO) holds 100 percent equity, with headquarters organized into four divisions: renewable energy, just transition, safety technology, and planning and management.
The power sector, which was split apart in 2001 under the rationale of promoting competition in the electricity industry, will be reunified after 25 years. The integrated corporation's power generation capacity will reach 53 gigawatts, placing it in the world's top eight when Chinese companies are excluded.
The five power generation companies currently have headquarters scattered across Jinju in Gyeongsangnam-do (KOEN), Boryeong and Taean in South Chungcheong Province (KOMIPO and KOWEPO), Busan (KOSPO), and Ulsan (EWP).
The government believes that the existing office buildings, each accommodating around 500 people, are insufficient for a unified headquarters that will employ approximately 1,800 people, and is considering constructing a new headquarters building.
Both options are on the table: selecting one of the five existing headquarters locations or establishing a new headquarters in a third region. The location will be determined after considering the current locations of power utilities, the impact of coal power plant closures on regions, living and working conditions, and in coordination with the second phase of public institution relocation policy.
Existing headquarters locations enter the competition
The existing headquarters locations have already entered the bidding race.
Gyeongsangnam-do Province and Jinju City signed a memorandum of understanding in April with the KOEN labor union to attract the unified headquarters to Gyeongsangnam Innovation City.
In South Chungcheong Province, Taean and Boryeong are mentioned as candidate locations. The competition structure became more complex when Naju in South Jeolla Province, where KEPCO headquarters is located, also joined the race.
Naju's Bitgaram Innovation City is home to key power sector institutions including KEPCO, Korea Power Exchange (KPX), KEPCO KPS, and KEPCO KDN. Naju City officially requested the government to attract the unified headquarters, arguing that with it in place, the city could encompass the entire power industry from generation to transmission and distribution, power trading, and equipment maintenance in one location.
Daegu and Ulsan face off over energy resources merger
Daegu and Ulsan are in direct competition over where to place Energy Resources Corporation, which will merge KNOC and Korea Gas Corporation. KNOC headquarters is in Ulsan and Korea Gas Corporation headquarters is in Daegu.
The government's plan is to integrate the two institutions to strengthen energy supply chain response capabilities and international negotiating power.
Daegu City emphasizes the scale of the institution. Based on 2025 public institution management disclosure standards, Korea Gas Corporation far exceeds KNOC in all metrics: workforce (4,305 people versus 1,456), assets (53.6278 trillion won versus 19.4442 trillion won), and sales (35.7273 trillion won versus 3.1365 trillion won). The workforce is roughly three times larger, assets are 2.8 times larger, and sales exceed 11 times. Daegu also points out that Korea Gas Corporation's central control center manages in real time the nationwide natural gas trunk pipeline spanning 5,346 kilometers and 445 supply management offices, making the case that the hub of the nation's energy supply network should be located in Daegu.
Ulsan City counters with its industrial base and future energy infrastructure. The city already has a structure in place not only to store imported resources but also to refine and process them for supply to industrial sites. Ulsan also has a hydrogen pipeline network spanning approximately 198 kilometers, is pursuing the development of a North Shin Port hydrogen terminal with an annual capacity of 320,000 tons, and has a solid foundation for energy transition including floating offshore wind power.
Ulsan argues that for the integrated institution to become a comprehensive energy organization that goes beyond oil and gas management to lead energy transition, both headquarters and research and development functions should be located in Ulsan. Ulsan is home to both EWP and KNOC headquarters, so the city has stakes in the location decisions for both integrated public corporations.
Financial and regional factors must be weighed
Experts point out that because the location of the unified headquarters will have enormous ripple effects on regional economies, the decision should comprehensively consider the financial condition of the institutions and their contribution to regional economies. When headquarters relocate, thousands of employees and their families move, along with local tax revenue, regional talent recruitment, and work for partner companies. The fact that each power company has pursued cooperative projects in its headquarters location and that regional employment issues are intertwined makes the calculation complex.
Financial condition is also a critical variable. Korea Gas Corporation holds approximately 10.8 trillion won in capital as of the end of last year, but KNOC is in a state of complete capital impairment with liabilities exceeding assets. Given that the two institutions have vastly different financial strength, experts note that location decisions must account for relocation costs and operational efficiency after integration.
Industry voices call for the government to clarify the criteria for location selection to prevent the bidding competition from escalating into regional conflict, and to present a plan to divide functions by region.
An energy industry official said, "The competition among local governments will inevitably become fiercer because the location of a single unified public corporation headquarters will have substantial effects on regional economies. However, rather than simply looking at which region has more existing organizations, there is a need to objectively determine the decision based on post-integration business efficiency, industrial linkage effects, and regional economic contribution."
Original Korean article: asiatime.co.kr
English brief by Korea Wind Intelligence, koreawindintel.com
