In compliance with the government's policy of generating a low carbon and green growth engine and to effectively address the tightening international control of greenhouse gases, Korea Electric Power Corporation (KEPCO, President and CEO: Kim Ssang-su), a world-renowned electric power and utility company, has been aggressively developing and supplying new renewable energies since 2006. Having entered into the Renewable Portfolio Agreement, or RPA, with the government, KEPCO and its share-holding companies have generated 288MW of renewable energy through solar and windgeneration methods from 2006 to 2008, investing a total of 520.1 billion won (US$387 million). For the second RPA, which will be implemented between 2009 and 2011, KEPCO is now drawing up a specific plan for generating new renewable energy. In line with the adoption of the Renewable Portfolio Standard, or RPS, by the government, KEPCO will continue developing large scale new renewable energy sources such as tidal and wind power with the goal of increasing the ratio of renewable energy to 3% of its total power output by 2012 and to 10% by 2020.
In an effort to obtain the certified emission reduction (CER), the total electric power supply service company in Korea registered the Clean Development Mechanism, or CDM, at the United Nations in March this year. Addressing ever-tightening regulations to reduce greenhouse gases in the international community, the company is actively developing CDM programs at home and abroad. In Korea, KEPCO registered 7 CDM programs, reducing 100,000 tons of greenhouse gases with anticipated CER earnings of 2.5 billion won (US$1.87 million) annually. It also registered 9 CDM programs in foreign countries, reducing 420,000 tons of greenhouse gases with anticipated earnings of 6.1 billion won (US$4.56 million) a year. The company is also carrying out a CDM program of collecting and recycling sulfur hexafluoride gas (SF6) in power transmission and distribution facilities with a goal to register with the United Nations in 2010. Through this program it expects to gain CER for 2.63 million tons and sales earnings of 47 billion won (US$35.11 million) a year.
To enhance energy efficiency and materialize the green office initiative, KEPCO is replacing existing incandescent electric lamps and halogen lamps with LED lamps, starting with its head office, KEPCO Art Center, KEPCO Academy and the training institute in Seokcho. Aiming to replace 30% of its lights with LED lamps by 2012, the company will begin to expand, installing LED lamps to other offices and facilities in 2010. As part of its strategy to improve energy efficiency, it is also installing smart grids in connection with its power information technology (IT) development projects. The company plans to install an integrated power IT complex by November 2013 and begin commercializing the smart grid in 2012 on an incremental basis.
In addition, the company is concentrating resources on developing new growth engines such as fuel cells and solar cells. Since 2008, it has been increasing investment in developing next-generation technologies from 232.6 billion won (US$173.8 million) in 2008 to 325.4 billion won (US$243.1 million) in 2009. It plans to further increase R&D investment from 468.9 billion won (US$350.27 million) in 2010 to 1.6216 trillion won (US$1.21 billion) in 2020. Six major next-generation growth engine technologies under development include a 600MW integrated gasification combined cycle (IGCC), 1MW molten carbonate fuel cells (MCFC), 0.1MW solid oxide fuel cells (SOFC), transparent solar cells, smart power distribution systems, and a 154kV superconducting fault current limiter.
As of December 2008, KEPCO and its 6 subsidiaries, including Korea Hydro & Nuclear Power Co., Korea South-East Power Co., Korea Midland Power Co., Korea Western Power Co., Korea Southern Power Co., and Korea East- West Power Co., are generating 587.21MW of renewable energy combined, accounting for some 0.92% of their total power output. Of the total renewable power output, hydroelectric power represents 550.49MW with nearly all of it being generated by Korea Hydro & Nuclear Power. These companies generate 11.42MW of solar energy and 24.75MW of wind energy.
Under the RPA, KEPCO and 6 subsidiaries invested a total of 520.08 billion won (US$388.5 million) for two years between 2006 and 2008 as Korea Midland Power invested the largest amount of 111.4 billion won (US$83.2 million). It was followed by Korea Western Power, Korea Southern Power and KEPCO investing 110.41 billion won (US$82.48 million), 100.86 billion won (US$82.81 million), and 71.9 billion won (US$53.7 million), respectively. Korea South-East Power, Korea Hydro & Nuclear Power and Korea East-West Power injected 51.82 billion won (US$38.7 million), 51.02 billion won (US$38.11 million) and 22.67 billion won (US$16.93 million), respectively. For development of technologies, KEPCO and its subsidiaries spent a total of 127.72 billion won (US$95.4 million) in the same period with KEPCO investing the largest amount of 59.98 billion won (US$44.8 million), and followed by Korea Western Power and Korea Midland Power with 36 billion won (US$26.89 million) and 18.1 billion won (US$13.52 million), respectively.
As the domestic electric power market is becoming increasingly saturated, KEPCO began to branch out into overseas markets in the middle of the 1990s, leveraging its experience accumulated in the domestic market over several decades. In 1995 and 1996, the company won contracts for revamping and operating Malaya Thermal Power Plant and for constructing Ilijan Thermal Power Plant in the Philippines. Since then, the company won projects for constructing and operating power plants in many other countries including China, Jordan, Saudi Arabia, Lebanon, Nigeria, Ecuador and Kazakhstan. Most recently, the company was selected as the priority negotiator for a US$2.5 billion project to construct and operate Rabigh Thermal Power Plant in Saudi Arabia with an output capacity of 1,204MW on a build, own and operate basis. Anticipating a sharp increase in demand for nuclear power plants, it will concentrate particular efforts on exporting Korean nuclear power plants to foreign countries, focusing on China, Jordan, the United Arab Emirates, and Turkey. At the same time, the company is actively investing in developing resources such as bituminous coal and uranium abroad. It bought stakes in two bituminous coal mines in Australia with estimated coal deposits of 1.2 billion tons combined, and in two uranium exploration projects in Canada. Through these overseas projects and operations, the company aims at increasing sales in the global market from 500 billion won (US$373.5 million) this year to 18 trillion won (US$13.45 billion) in 2020.