EWP Enters U.S. Renewables Market

Acquires Marubeni Sustainable Energy Inc.

Korea East-West Power Co. (EWP) has been accelerating its bids to make inroads into overseas markets including the United States.
In its latest move, EWP signed a contract to take over four power plants from Marubeni Sustainable Energy Inc. (MSEI), the subsidiary of Japan’s Marubeni Corp., on Sept. 30 after outbidding four U.S. power companies.
The power plants acquired by EWP consist of an 18MW-class biomass power unit in California; two biomass plants in New Hampshire, each with a capacity of 18MW; and a 12.8MW-class gas-powered unit and a 4MW-class diesel-powered unit in New York, for a combined capacity of 70.8MW.
EWP said it purchased the power units from MSEI for around 42 billion won, adding that the Korean power company is forecast to post $1.6 billion in sales and around $240 million in net profits by operating the facilities.
Starting Oct. 1, EWP has been charged with the operation of the acquired power units. Initially, three EWP staff members have been dispatched and 10 more EWP officials will be sent there according to business circumstances, EWP said.
Departing from its overseas businesses in such emerging markets in Asia and South America, EWP’s acquisition of power facilities in the United States will likely raise revenues in the American market and also enhance its global standing, EWP officials said.
Crews in charge of operating Korean power units have a competitive edge in terms of labor costs compared with their counterparts in the United States, so a majority of those operating the acquired U.S. plants can be replaced with EWP officials, having an effect of creating jobs, they said.
The project in the United States is expected to provide EWP with an opportunity to acquire experience and expertise concerning the management and operation of power plants in advanced countries. In particular, EWP’s experience related to the operation of the U.S. biomass plants will be a precious asset, essential for the projected Donghae Biomass Plant EWP is now undertaking, according to the EWP officials.
EWP has become the first Korean power company to enter the U.S. power generation market. With the acquisition of the power plants from MSEI, EWP plans to accelerate its moves into the North American market.
Unlike emerging markets, the U.S. power market is considered to be transparent with less country risk and more stable revenues.
EWP plans to implement additional businesses on idle plots of land at the acquired power plants with a focus on expanding business portfolios, including such new and renewable energy sources as photovoltaic and wind power, considered to have relatively higher feasibility in the U.S. market.
In the past two years, EWP has been accelerating its efforts to expand its business portfolios abroad. EWP has been operating a diesel-powered plant in Guam, a U.S. territory, since this past July. EWP’s efforts to expand its businesses abroad have paid off, acquiring experience and expertise and raising profits by entering the power markets in such countries as the Philippines, Haiti, Chile, Sudan and Australia.
In a related development, EWP signed an MOU on the joint construction and operation of four coal-fired thermal power units in Nam Dinh, Vietnam, with Taekwang Industrial Co. on March 5.
The agreement calls for the two Korean companies to build and operate four thermal power plants with a combined capacity of 2,400MW (600MW each) in the northern province of Nam Dinh in two stages. The first stage is to be completed by 2017 and the second one by 2021. The projected thermal power plants will be operated by the two companies for 25 years after dedication.
The signing of the MOU for the power projects in Vietnam indicates that EWP has been recognized for its capabilities in operating power generation plants. The power company is known for possessing its own knowhow for operating circulating fluidized bed combustion power plants in Korea.
EWP has also been strengthening its presence abroad by successfully implementing such projects in emerging markets as the 1,320MW-class coal-fired thermal power plant project in Orissa, India.
EWP has a vision, founded on accumulated experience and competence, to overcome the growth limits of the domestic power industry and to become one of the top 5 ranked Asian global energy companies by 2012.
To realize this vision, EWP has opened new departments specializing in new projects and new and renewable energy businesses. In Korea, EWP is expanding its business areas by participating in power generation consulting for private companies and CES (Community Energy System) projects. Throughout the global market, EWP is delivering tangible achievements from overseas projects such as technological consulting, technological support, power plant construction and energy resource acquisitions. nw

Korea East-West Power Co. President & CEO Lee Gil-gu and Marubeni General Manager Yoshihiro Magata pose for a group photo session after the former signed a contract to takeover four power plants from Marubeni Sustainable Energy Inc.