A1 Dongbu Green Power 6000MW Plan
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Transcript of A1 Dongbu Green Power 6000MW Plan
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13. 5. 27. Korea Joongang Daily
koreajoongangdaily.joinsmsn.com/news/article/option/article_print.aspx 1/4
Governments decision to open doors sees surge in conglomerate interest
NEWS IN FOCUS
Apr 30,2012
Thermal plants a hot investment
With the governments
decision to open doors to
private companies to build
thermal power plants as a
measure to prevent power
shortages, related businesses
have been jumping on
upcoming projects one after
another due to their high
profitability.
Conglomerates are vying for
inclusion in an energy
complex project in
Samcheok, Gangwon, where
they can construct coal-fired
power plants that are low in
cost and high in profitability.
With Samsung C&Ts latest challenge to join the project, a total of five
companies are competing to get the two tickets to the energy complex.
The Samcheok project is part of the citys long-term goal to become an
energy mecca. The city plans to propose its power generation business to
the sixth power supply plan, which will be announced at the end of the year
by the Ministry of Knowledge Economy.
Following the path set by STX Energy and Posco Energy last year, Dongbu
Group and Tong Yang Group inked MOUs with the city on Tuesday and
Samsung C&T plans to clinch the deal next month.
Dongbu is planning to create a clean-energy complex dubbed Green
userHighlight
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13. 5. 27. Korea Joongang Daily
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Samcheok Enertopia, including an eco-friendly coal-fired power plant with
a 6,000-megawatt capacity on a 2-million-square-meter (21.5-million-
square-foot) land by 2022.
The group is pushing to build a 1,000-megawatt thermal power plant in
Dangjin, South Chungcheong, by 2015. The Dangjin plant will become the
first independent power plant based on coal to be built by a private
company.
Building a thermal power plant using coal takes a shorter amount of time
than building nuclear plants, said Yoon Hyung-gang, an official at Korea
Electric Power Corporation (Kepco).
It is forecast that private companies would see about 50 percent in the
sales-to-operating profit rate from selling power made from coal, Yoon
said. He added that the percentage is outrageous given that Samsung
Electronics recorded 9.7 percent last year.
The price of electricity is determined based on the price of power made
from liquefied natural gas (LNG) in the Korean market, the Kepco official
explained.
LNG is priced at 132 won ($0.11)per kilowatt-hour in the market, making
the consumer price for all types of power 133 won. However, the
production cost of power from coal is 67 won, which means the companies
will reap in bigger earnings, he said.
Tong Yang Power, a new thermal power subsidiary of Tong Yang Group, is
making an all-out effort to build a plant. It plans to construct a 4,000-
megawatt plant with an 11 trillion won investment on land where a mine
run by Tong Yang Cement is located.
STX Energy and Posco Energy, meanwhile, signed a 7 trillion won and an 8
trillion won deal, respectively, earlier this year.
Notably, some engineering and construction (E&C) companies are also
making moves to build thermal power plants in order to be included in the
governments power supply plan.
According to the Korea Power Exchange, nine private E&C companies have
revealed their intention to build 21 million kilowatts of power plants.
userHighlight
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13. 5. 27. Korea Joongang Daily
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Dongyang E&C, Hanyang E&C and Keumho E&C want to enter the power
market, an official at KPX said.
These newcomers are preparing to start the power businesses by joining
forces with other firms.
Dongyang E&C plans to form a consortium with GS Power to build two 1-
million-kilowatt thermal power plants. SK E&C and Samsung C&T are
cooperating with Korea South East Power to build two 1-million-kilowatt
thermal power plants each.
Industry officials say the power plant business is gaining in popularity as a
new growth engine for E&C companies that have faced declining orders in
their original business area.
Builders are turning their eyes to coal-fired power plants, because costs to
generate power at a thermal power plant are comparatively low, ensuring
profitability, an insider said.
He projected that E&C companies would continue to participate in the
power market.
However, he pointed out one of their concerns: Building a thermal power
plant faces opposition from residents in the region, so companies need to
make plants greener, the official said.
Across the country, there are 45 coal-fired power plants and about 10 more
plants are being confirmed to be constructed, according to data compiled by
KPX.
Power industry officials say, the Knowledge Ministry is mulling over a
measure to build additional coal-fired power plants with a total capacity of
22,000 megawatts.
If the measure is included in the sixth power supply plan at the end of the
year, Korea will have 11 times greater volume of electricity produced out of
coal in comparison with the fifth plan.
The government renews the power plan every two years.
Worries about blackouts in the summer and winter appear repeatedly as
supply is failing to catch up with demand, an official at the ministry said.
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13. 5. 27. Korea Joongang Daily
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The official said the government is considering increasing the number of
coal-fired power plants as a practical solution.
By Song Su-hyun [[email protected]]