Gov't to Develop Electricity
Industry into Exporting Engine

Provides financial support in five areas to Korean concerns turning to overseas exploration

The government is launching a project to develop the electricity industry as one of the nation's promising exporting industries.
The Ministry of Commerce, Industry and Energy (MOCIE) announced on March 5 that it has set aside 6 billion won to help Korean electricity firms enter the foreign electricity market.
Sung Yoon-mo, director of Electric Power Industry Division at MOCIE, said from this year, the government will provide financial support in five areas: promising market survey & project exploration, export feasibility study, pilot project on exporting excellent electric power technologies, international manpower network buildup in the electric power industry, and overseas electric power industry database buildup and informatization.
The support program will comprise of projects related to all stages for entering the overseas market - promising market survey, feasibility study, pilot project and main project. Applications are required to be submitted by the end of March and beneficiaries will be determined by first and second screening processes.
In particular, such projects as the ones on which an MOU with would-be project orderers has been inked or a letter of intent has been delivered as well as the ones entrusted to the government by orderers and being recommended for large companies and
SMEs'joint entry will be given preferential treatment.
MOCIE officials said the support program will provide efficient support to companies which intend to enter the overseas electric power market, thus serving as a foundation for evolving the domestic power/electric industry into Korea's exporting engine.
STRIDES OF DOMESTIC ELECTRIC POWER INDUSTRY. The local electric power sector has been growing by leaps and bounds abreast of the rapid development of the national economy. In 1961 when Korea Electric Power Corp. (KEPCO) was established, the domestic electric power industry was backward with power facilities with a combined capacity of 367MW, equivalent to the capacity of an existing medium-sized coal-fired power unit.
How things have been changing 45 years later, then's Korea has become the 12th electricity powerhouse in the world with a capacity of 65,230MW, representing an approximately 180-fold jump over the capacity at the time of the establishment of KEPCO.
KEPCO has witnessed its technology levels being upgraded the way the Korean utility giant has grabbed the prestigious Edison Award for the second time.
However, despite these rapid strides, the domestic electric power industry is facing with many tasks it has to tackle with in the years to come. A rapid economic growth can no longer be expected, so the increase rate of electricity demand is likely to be slowed down. The local power industry, which maintained an average growth range of 10 percent in the 1990s, is projected to grow at an annual average of 1.4 percent after the year 2010.
As a step to tide over the upcoming stalemate, the domestic power industry needs to turn to the exploration of overseas market. Figures released by the influential journal People to the Power show that the global electric power market is projected to grow to $10 trillion in the year 2030. In particular, China is predicted to register an annual increase rate range of 10 percent in electricity demand and needs to construct new power units with a combined capacity of more than 50,000MW on an annual basis, an equivalent to 80 percent of Korea's total power demand.
Besides, such countries with rich resources as Nigeria, Angola, Azerbaijan and Bangladeshi are scurrying up for the construction of power plants to meet their rising electricity demand. Korea now stands at a watershed where it can earn an opportunity not only to enter the overseas electric power market but also to secure a stable supply of energy sources. President Roh Moo-hyun's state visit to Nigeria in 2006 has offered a Korean-type development model: a package of overseas petroleum development linking power plant construction.
As a matter of fact, despite these efforts, KEPCO still lags behind the levels of France's EDF and Japan's Tokyo Electric Power. EDF now exports 25 percent of its power generation to its European neighbors with the goal of raising the figure to 50 percent. Tokyo Electric Power posted 50 billion yen in sales from the implementation of new overseas projects in 2005, 2.5 times as much as KEPCO's sales.
Korean electric power companies have been putting more energy into exploring overseas markets in the wake of the market-opening of the global electricity market. A case in focus is KEPCO, which has been strengthening its presence abroad.
KEPCO's OVERSEAS MARKET EXPLORATION. It was in the early 1990s that 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 liberalizations measures and Free Trade Agreements.
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. nw

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