Over the past 115 years, the key function of the state-run KEPCO has been to supply the nation’s electric power. But in an age of energy diversification, its objective is no longer just about electricity.
This is how the public power supplier came to take charge of the 22nd World Energy Congress 2013, which is to take place in Daegu this week.
KEPCO was first founded as a market-oriented public corporation with the objective to facilitate the development of the electricity supply in Korea and to contribute to the national economy.
It initially kicked off as Hansung Electric Company in 1898, when the core function was the operation of Seoul’s first electric train line and the construction of a hydro power plant.
After joining the International Atomic Energy Agency in 1957, the power provider later changed its name to the Korea Electric Company and then to the current title KEPCO, beginning its drive to build the nation’s power grid.
The company’s key shareholders are the Korea Finance Corporation and the government, which respectively hold 29.94 percent and 21.17 percent of its total stocks.
Its areas of business include the development of electric power resources, electric power generation, transmission, transformation and distribution, as well as related marketing research and technological development.
“Electricity is a vital commodity which is produced and consumed simultaneously,” said a KEPCO official.
“As it cannot be stored economically, an appropriate level of reserve facilities must be secured at all times for stable power supply, and this can only be achieved by a state-run organization.”
KEPCO’s role is all the more significant, as Korea is heavily reliant on energy imports ― up to 97 percent ― but its grid is isolated, not in a position to import or export power.
As of last year, its total assets amounted to 146 trillion won and its sales 49.4 trillion won, up 13.7 percent from the previous year.
It, however, recorded an operational deficit of 817.9 billion won and a net loss of 3.1 trillion won, reflecting the necessity to redesign its business and profit portfolio.
This financial obstacle, along with negative external circumstances such as the inflation of power costs and lack of supply stability due to climate change, pushed KEPCO to devise its new vision, “Global Top Green & Smart Energy Pioneer.”
To thoroughly achieve this goal, the company classified its energy resources into three key categories ― thermal power, nuclear power, and new renewable power.
Despite ongoing controversies on safety, nuclear power is undeniably a representative, eco-friendly and economic energy source.
Korea, which is already the world’s fifth-largest nuclear power country, currently holds 23 nuclear power units with five more under construction. Another ten will be added to the list by 2030.
KEPCO’s renewable energy business kicked off in 2005, when it established a joint wind power venture with China Datang Corporation in China.
Ever since then, its wind power sector has been expanding, especially in China, Mongolia, and the Middle East.
Equipped with its conventional forte in the electricity business and the newly-developed energy sectors, KEPCO is now eyeing the overseas market as a means to overcome the limits of the domestic market.
Since 1997, the state-run company has been building power plants in Philippines, China, the United Arab Emirates, and many other states.
It has also been involved in the coal generation business in China and a gas combined-cycle power plant in Jordan, reflecting its pledge to become a total energy service provider covering all energy sectors.
One remarkable achievement is the successful bid for a gas power plant in Mexico, marking KEPCO’s first-ever activity in Latin America, which has traditionally been dominated by Japanese and Spanish companies.
Despite its continuous expansion, however, Korea’s energy supplier is also faced with the growing demand for energy resources, driven by the growth of developing countries and the rising cost of crude oil and raw material.
“In order to maintain the electricity business on a sustainable manner, it is crucial to secure valid energy resources amid a rapidly changing global business environment,” said a KEPCO official.
This is, in fact, one of the questions to which KEPCO hopes to find the solutions during this year’s energy congress, the official added.
By Bae Hyun-jung (firstname.lastname@example.org)