Korea Hydro & Nuclear Power Co. (KHNP) and KEPCO are expected to make losses this year. KHNP is expected to turn into a deficit with net loss exceeding 1.2 trillion won. KEPCO is also likely to record net loss of 448 billion won.
The result is a financial indicator that reflects the effects of the new government's nuclear phase-out policy. The government claims that the deficit of KEPCO and KHNP is irrelevant to the elimination of the nuclear plant, but criticism is likely to rise.
According to the Asia Economy, the Ministry of Strategy and Finance submitted its report to the National Assembly on Tuesday. It is expected that KEPCO will record 448 billion won in net loss this year, turning into a deficit compared to last year. It is the first time in six years that KEPCO recorded net loss on an annual basis. Five years later, the situation is not likely to improve much, and the net profit is expected to be only 6.64 billion won per year. During this period, the debt ratio will deteriorate significantly from 101 percent to 136 percent.
The situation in KHNP is worse. The net loss is expected to reach 1.2 trillion won this year, and it is estimated that the net loss will be 170.8 billion won in five years. The debt ratio will deteriorate from 132% to 153%.
As KHNP and KEPCO turned into deficits one year after another, controversy is expected over the impact of the government's nuclear phase-out policy.
The Ministry of Trade, Industry and Energy explained on Aug. 14 that although there are reports that the deficit in the first half of the year is due to the nuclear phase-out policy, it is not true. Former Minister of Trade, Industry and Energy Baek Woon-kyu also said several times that the deficit of KEPCO and KHNP was not due to the government's policy.
However, as the financial index rapidly deteriorated, voices calling for responsibility for the nuclear phase-out policy are expected to be stronger.
Chung Dong-wook, a professor of energy system engineering at Chung-Ang University, said to the Asia Economy, "It is natural that natural gas and coal with more expensive and energy-sensitive fuels continue to replace electricity generation. Under the policy, the deficit trend will continue for the years to come."
