It has been confirmed for the first time that Korea Electric Power Corporation (KEPCO) and six power generation companies such as Korea South-East Power have made more than $3.34 billion (4 trillion KRW) in sales from new contracts and completion of power plants in foreign countries since the South Korean Government announced its roadmap for energy conversion in October of 2017. Contracts for new renewable energy projects are acting as “timely rain” for South Korea’s energy industry that has not obtained any new contract for nuclear power plant since Barakah nuclear power plant in 2009.
According to the Electronic Times’ news material, KEPCO and six power generation companies have obtained 16 contracts related to new renewable energy and constructed power plants since December of 2017. As a result, they have made $3.33 billion (3.9942 trillion KRW) in sales.
KEPCO is expecting to make $1.67 billion (2.0061 trillion KRW) in profit from five projects related to new renewable energy. It is going to start the construction project of a 60MW solar power plant that it won from Guam Power Authority sometime during the first half of this year and finish the construction by November of 2021. It is also going to construct a 32MWh ESS (Energy Storage System) at the same time and it is expected to make about $338 million (404.9 billion KRW) in sales for the next 25 years through a BOO (Build-Operate-Ownership) project model that will have KEPCO responsible for the construction and the operation of the plant. In September of 2019, it obtained a contract for building a 294MW solar power plant in Mexico and it is expecting to make about $239 million (287 billion KRW) for the next 35 years.
KEPCO is also expecting to improve its profit from the completion of new renewable energy power plants. KEPCO completed the construction of a 89.1MW Fujeij wind power plant in Hussania and set its foot on its first wind power business in the Middle East. It is expected to make about $566 million (678.8 billion KRW) in sales by operating this power plant for the next 20 years. KEPCO also acquired 38% of the shares of the Calatagan (50MW) solar power plant in December of 2018 and signed a long-term power supply contract with the national power transmission corporation and is expecting to make $265 million (318 billion KRW) in sales for the next 18 years. It owns 80% of the shares of the Chitose solar power plant that was completed in December of 2017 and it is expected to make about $265 million (317.4 billion KRW) in sales for the next 25 years.
Out of six power generation companies, Korea South-East Power’s performance in overseas business is vastly exceptional compared to other five companies. Korea South-East Power obtained a contract for a distributed solar power plant in Chile (50MW, 50% shares), a contract for Upper Trishuli-1 water power plant in Nepal (216MW, 50% shares), a contract for Gulpur water power plant in Pakistan (102MW, 76% shares), a contract for Asrit-Kedam-1 water power plant in Pakistan (215MW, 60% shares), and a contract for Asrit-Kedam-2 water power plant in Pakistan (238MW, 60% shares). Out of these five contracts, it already completed the construction of two plants and it is planning to finish the construction of remaining three plants between September of 2025 and December of 2027. Korea South-East Power expects that it will make $1.30 billion (1.5604 trillion KRW) in sales through these five projects.
Korea Southern Power is expecting to make $51.6 million (61.8 billion KRW) in profit until November of 2043 through a PMG solar power plant (38MW) in Chile that is expected to be completed this month and $137 million (164 billion KRW) in profit for the next 20 years through a wind power plant in Jordan that is expected to be completed in August. Korea East-West Power Corporation owns 49% of the shares of the distributed solar power plant in Chile that broke ground in June of 2019 and it is expecting to make $83.8 million (100.4 billion KRW) in sales for the next 25 years. Korea Midland Power is expecting to make $65.3 million (78.3 billion KRW) in sales for the next 25 years through the Stavro wind power plant in Sweden that is expected to be completed in November of 2021.
Korea Hydro & Nuclear Power is expecting to make $13.5 million (16.2 billion KRW) in sales from the EPC (Engineering, Procurement, and Construction) project model of “the Chameliya water power plant (30MW) in Nepal”. Korea Western Power is expected to make about $5.84 million (7 billion KRW) by owning 6% of the shares of “the Bannerton solar power plant (110MW) in Australia”.
Experts predict that the speed of public energy enterprises and private energy companies expanding their new renewable energy businesses overseas will become much faster. They can maximize efficiency of their overseas businesses as they can generate and sell power at the same time in foreign countries unlke South Korea. Also, it is expected that business opportunities will open up for South Korean companies as countries expand their supplies of new renewable energies as they participate in energy conversion. Also, it is expected that South Korean companies will start to have their eyes on new renewable energy businesses as it will become more difficult to obtain financing and bonds to construct coal-fired power plants in foreign countries.
“We are planning to continuously create jobs from overseas by diversifying our business area towards new renewable energy.” said a representative for KEPCO.
Staff Reporter Choi, Jaepil | jpchoi@etnews.com