KEPCO Striving to Become
Global Energy Group
- Cashing in on its local experiences to explore foreign markets

It was in the early 1990s that Korea Electric Power Corp. (KEPCO), which had been discharged with a national mission of supplying power since its inception in 1961, made a foray into the overseas power generation market.
About 10-odd years have passed since its debut in overseas markets, and KEPCO is now given higher marks in Asia, particularly the Philippines, China, Taiwan and Myanmar with its successful operation of power plants and offering services.
KEPCO, cashing in on its accumulated expertise and experience in the domestic power generation sector, have been accelerating its presence in the overseas markets with the goal with become a global power generation player. Like advanced global powerhouses, expanding its presence abroad has become KEPCO's key strategy designed to maintain a sustainable growth in the future by enhancing management efficiency and secure new revenue sources. KEPCO's strategy has paid off: showing off a competitive edge in Korea and abroad and raising Korea's profile.
KEPCO has already concurred about the need for expanding overseas power generation projects and its subsequent consensus has been built up over its urgency now that unlimited global competition has ushered in following global trade liberalization measures and Free Trade Agreements.
In particular, KEPCO's overseas power generation business sector has gained momentum as a comprehensive plant export industry, as the incumbent KEPCO President Han Jun-ho has repeatedly expressed his determination to push for overseas power projects by capitalizing on its own brand power and excellent technology prowess since its inauguration at the helm of the power utility company about a year ago.
In reality, KEPCO has made remarkable strides as a Korean utility giant, which is on par with global power generation players in terms of capacity size, technology levels and management efficiency.
KEPCO, however, has been faced with such rapidly-changing management conditions as the pressure on the opening of the local electricity market, expansion of substitute energy and customers' demand for greater choice and calls for installing environmentally-friendly facilities. The Korean utility giant, having already gained recognition as the second power provider in the Philippines, is now turning to overseas markets. Seeing overseas market exploration as one of driving forces for future growth, KEPCO is expanding its horizon to tap the markets of China with huge potential, Southeast Asia, and other regions.
KEPCO President Han has put more energy into realizing a vision of elevating KEPCO into an energy hub corporation of Northeast Asia and furthering it into a global energy group which he declared earlier as an organizational goal.
Han has enumerated his major policies management reform, strengthening its futuristic growth capabilities and renewing its corporate image.
The president has emphasized that efforts would be made on management focusing on cultivating world-class and specialized manpower. Investments into providing educational opportunities like masters' and doctorate degree courses would be expanded.
With its overseas market exploration taking the center stage, he said, KEPCO is aimed at increasing its overseas power generation capacity to 10,000MW by 2015. KEPCO's businesses will be diversified in terms of industrial fields, ranging from nuclear power, power transmission, distribution and telecommunication sectors.
KEPCO will spearhead its participation in overseas natural resources development projects, one of the government's major state tasks, aggressively contributing to securing a stable supply of energy resources in the mid- and long-term period.
KEPCO has already secured its presence in the Philippines with the thermal and combined cycle power plant projects in Malaya and Ilijan.
It was in 1994 10 years ago that KEPCO made its debut in the global power generation sector by undertaking the Malaya project aimed at raising its capacity from 430,000 kW to 650,000 kW. The thermal power plant, under operation by KEPCO, has shown a better performance to date following the project.
The Ilijan project is under way under the 1,200,000-kilowatt combined cycle power BOT (Build, Operate, Transfer) agreement for 23 years from March 1999, including three years of construction. It turns out to be a high value added undertaking by KEPCO with a 20-year-return of profits and a government guarantee.
KEPCO landed the project by outbidding six global giants as Mitsubishi and Siemens.
KEPCO has now established itself as the second largest power provider in the Philippines with a capacity of 1,850,000 kW after Mirant with a capacity of 2,330,000 kW. The power unit in Illijan has gained global recognition as it was selected by the American magazine Power as one of the best power facilities in 2003 and Philippine President Gloria Arroyo has rated it highly.
KEPCO has pushed a project to build a 200,000-kilowatt thermal power plant in the Cebu area in earnest since last March.
KEPCO is trying to turn its eyes to power distribution and natural resources development sectors, as the Korean utility company's power loss rate stands at an average of less than 2 percent (1.79 percent in 2003), quite lower to some 20 percent in the Philippines. The Korean power utility company sees rosy prospects for its entry to the distribution sector if it technology and management capabilities are combined. The company has formed consortiums with local distribution businesses to enter the power distribution markets in the Pampanga and Olongapo areas.
Prospects for KEPCO's entry to the Chinese market are also rosy. China needs to have 30,000,000 kW more power capacity every year to meet a surging power demand as the Chinese power generation market with a capacity of 380,000,000 kW in late 2003, has grown an annual rate of 10 percent. China's annual additionally required power capacity is equivalent to 60 percent of Korea's current total power generation capacity standing at 56,000,000 kW.
China is apparently showing a keen interest in KEPCO's participation in fluidized bed combustion power and nuclear power plant projects.
KEPCO is participating in a joint venture with the Chinese side in accordance with an agreement, signed last year with Henan Province authorities to build and operate two 50,000-kw fluidized be combustion power plants. Last June, it has also signed an MOU for the construction of two 200,000-kilowatt fluidized bed combustion power plants.
In a bid to strengthen its foray into the Chinese power industry, KEPCO inked an agreement on collaboration on the power industry with Datang International Power Co., one of China's largest power companies, last June 16.
China emerges as one of the world's largest nuclear power plant construction markets as she plans to build 20 nuclear power plants with a total capacity of 36 million kW by 2020. Korea, which is self-reliant in terms of technology by developing her own Korean Standard Nuclear Reactor, has secured an international competitive edge with technology and expertise she has accumulated by repeatedly building nuclear power units. The country is now beefing up activities aimed at penetrating the nuclear power plant construction markets in China, Vietnam and Indonesia, which have pushed ahead with nuclear power unit construction projects.
In its overseas service sector, KEPCO has been brisk in providing such technology services related to nuclear power as repair services of nuclear power units and operation of other thermal plants to Asian countries, including China, Taiwan and Vietnam as well as Australia. KEPCO successfully completed a project aimed at renovating coal ash treatment facility for Eraring Nuclear Plant in Australia, an advanced country. KEPCO is actively carrying out overseas service projects by capitalizing on its accumulated expertise related to power transfer and distribution sectors.
On top of the Philippines and China, KEPCO is turning its eyes to Sri Lanka, India, Myanmar among other countries. The company is going ahead with a 20-year-old BOT project on a planned 300,000-kilowatt combined cycle power plant. KEPCO is now studying a pilot project on electricity telemetry system in Hariana State, India, while is conducting the service on the basic design on upgrading electricity transmission voltage to 500KV for two years from last January in Myanmar.
In light of the entry into force of the Kyoto Protocol on climate change, KEPCO is trying to develop new overseas projects by securing the carbon dioxide emitting rights in the course of implementing mandatory greenhouse gas emission reduction schemes. KEPCO sees the year 2005 as the start of accelerating a drive to realize its vision of becoming a global energy group. nw