UAE deal boosts KEPCO`s expansion plan

Korea Electric Power Corp. aims to become a global power supplier by aggressively moving into overseas market this year, company officials said yesterday. The company`s overseas expansion plan was in part motivated by a landmark nuclear reactor deal it struck with the United Arab Emirates.

A consortium led by KEPCO won a $20 billion deal to build four nuclear power plants in the UAE by 2020. It would generate an additional $20 billion in contracts for operation and maintenance over 60 years, KEPCO officials said.

The state-run utility firm plans to surpass cumulative revenue of 3 trillion won ($2.6 billion) with its overseas orders this year.

It has already decided to seek more overseas orders to build nuclear reactors in developing countries such as Turkey, India, China and Jordan.

Aside from its nuclear reactor business, KEPCO aims to export its technologies in building and operating thermal power plants in the Middle East, South East Asian countries and Africa as well as hydroelectric power generators in Laos, Georgia and Bolivia.



The leader in green energy will also expand its oversea operations in the area of power transmission, supply, renewable energy generation and consulting services. KEPCO earned 528 billion won through overseas operations last year. It plans to win 620 billion won worth of global business this year by exporting plants with bigger production capability.

By establishing strategic cooperation with natural resource rich countries such as Australia and Indonesia, KEPCO aims to secure fuels for power generation - soft coal for thermal power plants and uranium for nuclear reactors. Currently, the Korean utility firm can self-supply 11 percent of soft coal and 7 percent of uranium needs. But it plans to increase the portion of fuel self-sufficiency to 16 percent and 15 percent, respectively.

KEPCO`s search to business opportunities in overseas comes as the country`s largest electricity supplier finds it hard to expand the market size, and supply volume in the local market. "The growth of power demand in the 1990s hovered around 10 percent level but is now about a 3-4 percent level. The demand is likely to drop further down to 1 percent level after this year," an official said.



UAE deal

A landmark deal struck with the United Arab Emirates in December has emboldened Korea in its newly aggressive foray into the fast-growing global nuclear plant market.

Mohamed Al Hammadi, CEO of the Emirates Nuclear Energy Corporation, attributed Korea`s success to "the KEPCO team`s world-class safety performance and its demonstrated ability to meet UAE program goals." The deal made Korea the world`s sixth country to export commercial nuclear plants after the United States, France, Russia, Canada and Japan.

The achievement should convince the world of Korea`s nuclear power capabilities and help boost its chances in other markets including Turkey, Jordan, Romania and Ukraine, officials said.

Turkey is expected to build four nuclear reactors in its Black Sea areas, each estimated to be worth $5 billion. The bidding process should begin in the first half of next year.

KEPCO said it has been negotiating with Turkey to provide Advanced Pressurized Reactor 1400 light-water reactors, the same type it would build in the UAE.

The KEPCO-led consortium beat a French team led by industry leader Areva in the race for the industry`s most coveted deal.

KEPCO is also looking to China and India, which are planning to build more than 100 and 50 nuclear power plants respectively, as they strive to reduce dependency on fossil-fuels.

Korea started nuclear power generation in 1978 and now has the world`s sixth-largest atomic power generation capacity.

Korea`s victory attributes to the local nuclear power industry`s higher rate of operation, price competitiveness and short construction time.

A Korean nuclear power plant APR1400`s overnight capital cost is $2,300 per kilowatt, which is about 20 percent lower than nuclear power plants in other nations, the World Nuclear Association said in its report.

It took 52 months to complete the Korean standard nuclear power plant OPR1000, while the United States needed 57 months to build an AP1000, and France, 60 months to build the CPR1000, according to KEPCO.

The UAE deal marked the first export of Korea`s commercial nuclear power plants.

The contract, signed with the Emirates Nuclear Energy Corp. calls for the KEPCO team to design, build and help operate four 1,400-megawatt civil nuclear power units.

To have specialists on nuclear reactors, KEPCO plans to open the world`s first graduate school focusing exclusively on nuclear power plant studies in 2012. With its four affiliates - Korea Hydro & Nuclear Power, Korea Power Engineering Company, Korea Plant Services & Engineering and Korea Nuclear Fuel - KEPCO will support financing, training of the teaching staff and work in accordance to host a mix of local and foreign students at the planned international nuclear graduate school.



Smart grid,

green technology

KEPCO is taking a step toward a greener and smarter future by developing new energy technologies and infrastructure. Last year, the state-run firm announced its new management vision to be among the top five "green energy" utilities in the world. KEPCO and its subsidies plan to spend 3.3 trillion won by 2020 on the development of smart grid technology, infrastructure for plug-in cars, energy efficient homes and other related eco-friendly power generation technologies.

A "smart grid" is an IT-based electricity power distribution system; it is the company`s core green project.

Gujwa-eup on Jeju Island consists of 12 small farm villages, and in August was named the pilot community for smart-grid technology. By installing a smart grid, KEPCO hopes to transform the small town into a carbon-free, energy-efficient community by 2013.

KEPCO says it has been taking a lead in developing renewable energy sources, thereby minimizing greenhouse gas emissions.

In 2006, the company began building an Integrated Gasification Combined Cycle power plant with a 300 megawatt capacity. A combined-cycle power plant employs more than one thermodynamic process to minimize energy loss as most engines used in power generation are only able to use around 50 percent of the energy produced from fuel combustion.

KEPCO was the first to build and successfully operate a carbon dioxide capture and storage plant in the country. In a related program, the company has been developing new carbon dioxide absorbing materials and more economic carbon capture storage methods.

(christory@heraldm.com)



By Cho Chung-un