Attention is focusing on why the labor unions of the five generation subsidiaries of Korea Electric Power Corporation—Korea South-East Power, Korea Midland Power, Korea Western Power, Korea Southern Power, and Korea East-West Power—welcomed the plan for a "fully integrated corporation" during talks on consolidating and reorganizing the companies. Unions usually oppose consolidations, but contrary to concerns, they cast a vote in favor.
In the power generation industry, some analyze this as an alignment between employees' interest in protecting jobs and the government's policy direction.
The government aims to exit coal by 2040 and has decided to shut down the remaining 61 coal-fired power plants. More than 80% of domestic coal plants are owned by public power generation companies. With many jobs at risk of disappearing, the unions' calculation is that if an integrated corporation greatly increases investment in renewable energy, new jobs will grow and flexible job transitions will be possible.
According to the power generation industry on the 19th, three labor representatives who took part in a discussion at the "interim briefing on research to redefine the role of public power generation companies" held the previous day all expressed support for the "full integration" plan recommended by the research institution.
From labor, Senior Vice Chairperson Nam Tae-seop of the National Federation of Electric Power Industry Trade Unions, Standing Vice Chairperson Song Min of the National Federation of Public Industry Trade Unions, and Chairperson Je Yong-sun of the Korea Power Generation Industry Labor Union attended.
At first, the power generation industry expected the unions at the five generators to fiercely oppose consolidation, since restructuring due to overlapping functions and regional reassignments would inevitably follow. Consolidations of public institutions often come with severe labor-management and inter-union conflicts.
Generation company unions believe a large integrated corporation is necessary to enable a "just transition." A just transition means shifting in a way that prevents workers and local communities from being harmed during changes in the energy industry.
If the government shuts down coal plants, surplus personnel must be reallocated to the renewable energy sector. However, under the current five-company system, investment in renewables has been slow. So far, renewables such as solar and wind have been a market led by private operators. More than 90% of domestic renewable energy facilities are privately owned.
A research report prepared by Samil PwC includes a recommendation that the headquarters of the integrated corporation should proactively lead the management of large-scale offshore wind projects. Offshore wind projects are gigawatt (GW)-scale and require long-term strategies and large-scale investment.
Unions calculate that if a massive integrated public corporation enters the offshore wind market and creates quality jobs in installation and maintenance, existing plant workers could transition to new roles without layoffs.
However, there is concern that public generation companies have limited experience running offshore wind projects. According to the Electric Power Federation, the dedicated offshore wind workforce at the five generators is estimated at fewer than 50 people. That is far short compared with Ørsted, a Danish energy company, which assigns at least 100 people to start a single offshore wind project.
Because the market has formed around private corporations, the technology gap is also large. As of the end of last year, offshore wind power generation project permits granted through the Electric Committee totaled 35 GW, and private corporations accounted for 91% of them. More than half went to corporations from offshore wind powerhouses such as the United Kingdom and Denmark.
An industry source said, "For employees who worked at existing thermal power plants to learn offshore wind installation and maintenance skills, they have no choice but to collaborate with private corporations," adding, "From the perspective of private corporations, a public corporation would become a powerful competitor, so business limitations are expected."
The source added, "Accidents that used to occur at five companies could appear externally as more frequent when they occur at a single (integrated corporation)," and expressed concern that "this could become an obstacle in the process of newly pursuing businesses without the necessary technology and experience."