KEPCO Sets Its Sight on Being World-Class Co.

Chairman Kim unveils the company’s goal of raising sales to $76 billion by 2020

Amid a buoyant mood following Korea’s landmark winning of a $40 billion nuclear power deal from the United Arab Emirates last Dec. 27, Korea Electric Power Corp. (KEPCO) has an ambition plan to become a word-class company with the goal of raking in $76 billion (85 trillion won) in sales by 2020.
KEPCO Chairman and CEO Kim Ssang-su told reporters on Feb. 9 that his utility company, which posted 33.6 trillion won in sales in 2009, aims at growing into a global energy company equivalent to General Electric by 2020. Kim said, “On top of domestic electricity sales, KEPCO’s presence in five or six overseas business categories, including nuclear power plant export, nuclear power services, resources exploration, independent power providers (IPP) and smart grid, will flourish in earnest in a decade or later.”
In particular, he said, KEPCO has made a good start in the business of exporting nuclear power plants abroad as a Korean team, headed by KEPCO, has been awarded a project to build four nuclear power units in the UAE by 2020, the first-ever nuclear power facility project in the Middle East.
Following the nuclear power deal with the UAE, which will mark the first time Korea will export commercial nuclear power units overseas, he was apparently upbeat about the prospects of the Korean nuclear power industry. Kim said KEPCO will likely have the upper hand in making inroads into the Middle Eastern nuclear power market. He said he recently met with the chief executive officer of the state-run Saudi Electricity Company and discussed cooperation. KEPCO is also seeking to export two nuclear power units with Advanced Power Reactor 1400 (APR1400), built by Korea’s own technology, to Turkey, while pitching the idea that Korea is the most competitive business partner in the region in another attempt to land a nuclear power project from Jordan.
Now that Korea’s nuclear power prowess has been certified internationally by the deal, Korea is seeking to nurture the nuclear power construction industry into its mainstay export industry. The agreement will provide Korea with a good opportunity to expand its horizons overseas, capitalizing on a recent global resurgence of nuclear power, since it is sure to build a bridgehead for Korea’s expanding presence in the global nuclear power construction market.
The Korean consortium, led by KEPCO, defeated the French team of Electricite de France and Areva and a General Electric-Hitachi consortium. It teamed up with Korean companies Hyundai Engineering and Construction, Samsung C&T Corp., Doosan Heavy Industries and Westinghouse Electric Co. of the United States and Toshiba Corp. of Japan.
Mohamed Al Hammadi, CEO of the UAE’s state-run Emirates Nuclear Energy Corp., attributed Korea’s success to the KEPCO team’s world-class safety performance and its demonstrated ability to meet the UAE program goals.
Apparently motivated by the latest deal, the Korean government announced a grandiose plan to seize a 20 percent share of the global nuclear power market or export 80 nuclear power units by 2030 with the goal of moving into the global top three nuclear powerhouses. Currently, 430 nuclear units are in operation in 31 nations, but the demand for nuclear power is projected to surge to 1,000 reactors by 2050 amid the so-called renaissance of atomic energy in the wake of climate change and declining deposits of fossil fuels.
Korea has a track record of constructing and operating nuclear power units for more than half a century. The nation has accumulated expertise and experience since Kori Unit 1, the nation’s first nuclear power plant, went into commercial operation in April 1978. Korea has grown into a nuclear powerhouse with the world’s sixth largest nuclear power-generating capacity, as the nation now operates 20 nuclear power units providing 40 percent of its electricity supply, with plans to build eight more units. The nation is also constructing four units with Optimized Power Reactor 1000 (OPR1000), developed by Korea as the nation’s standard nuclear power plant, and four more with APR1400, an advanced Korean-type model.
The KEPCO chairman said KEPCO will continue to cooperate with Westinghouse, which has supplied original core technologies to help Korea build Korean-type nuclear units. He added that it is inevitable that they will keep on collaborating with Westinghouse since it will take time to confirm the safety of APR+, which is to be developed wholly technologically self-sufficient with the localization of core technologies by 2012.
Kim also expressed the hope that KEPCO will collaborate with Areva, its archrival in the UAE bidding race, if there are areas of mutual concern.
Regarding the possible reintegration of KEPCO with power generation companies, the KEPCO chairman stressed that he favored the reintegration, saying that it would take into account the outcome of a survey commissioned to the Korea Development Institute (KDI) that will come out in the first half of this year. He noted that the reintegration is better since each power company produces electricity with almost identical quality and also has no distinctive unit price difference.
He said the restructuring of the electricity market into a competitive system would lead to cut-throat competition, as was the case with UK electricity companies that ended up in bankruptcy. KEPCO has a 100 percent stake in six independently-run power companies, so they take the form of a kind of divisions of a in the form of a kind of divisions of the general company, he added. nw

Shin Kori Nuclear Power Units 3&4, now under construction with APR1400 in Korea, the same reactor as the one that will be employed to build four units in the United Arab Emirates.