As the government prepares a restructuring plan to merge the five power generation public corporations under Korea Electric Power Corporation (KEPCO), local governments are racing to attract the integrated headquarters. They judge that the establishment of the integrated headquarters will bring significant economic benefits in jobs, tax revenue, and population inflows.
The five power generation public corporations subject to restructuring are Korea South-East Power (KOEN), Korea Southern Power (KOSPO), Korea East-West Power (EWP), Korea Western Power (KOWEPO), and Korea Midland Power (KOMIPO). Each company's headquarters is scattered across the country. South-East Power is in Jinju, South Gyeongsang; Southern Power is in Nam District, Busan; East-West Power is in Jung District, Ulsan; Western Power is in Taean, South Chungcheong; and Midland Power is in Boryeong, South Chungcheong.
The five power generation public corporations were separated in 2001 under the government's power industry restructuring. But criticism has continued that similar lines of work have created unnecessary competition and that personnel and finances are operated inefficiently. The argument that the five should be merged to expand capital for investment in renewable energy such as wind and solar is also cited as a background for the integration talks.
◇ Taean, Jinju, Ulsan, Naju, and Gangwon Province move to attract the integrated headquarters
As of the 15th, according to the energy industry, Taean, South Chungcheong; Jinju, South Gyeongsang; Ulsan; Naju, South Jeolla; and Gangwon Province have jumped into the race to host the integrated headquarters.
South Chungcheong is seen as the most aggressive in attracting the integrated headquarters. The province currently hosts the headquarters of two of the five companies (Western Power and Midland Power). It also has 28 of the nation's 60 coal-fired power plants, the most in Korea.
In particular, Taean County, where Western Power's headquarters is located, the Taean County Council, and civil society formed the Tentative Countywide Committee for Attracting the Integrated Headquarters of the Five Power Generators to Taean to push signature drives, proposals to the central government, and lobbying activities through a single channel. In Taean, there is a pervasive sense of crisis that if Western Power leaves, 44% of local government tax will disappear and about 3,000 workers at the power plant and partner companies could leave the area.
A Taean County official said, "Aside from the power company and primary industries, Taean lacks a foundation to sustain the local economy," adding, "It is a crisis in itself if the integrated headquarters is set up elsewhere and Western Power exits Taean, so we have no choice but to pursue hosting the integrated headquarters."
Jinju, South Gyeongsang, argues it can cut expense by leveraging South-East Power's headquarters. The general student council at Gyeongsang National University in Jinju also called for attracting the integrated headquarters.
Ulsan, home to East-West Power's headquarters, highlights linkages with energy public institutions such as the Korea Energy Agency (KEA), Korea National Oil Corporation (KNOC), and Korea Energy Economics Institute (KEEI). Naju, South Jeolla, cites as a strength that power-related public institutions are clustered there, including KEPCO's headquarters, KEPCO KPS, KEPCO KDN Co. (KDN), and the Korea Power Exchange.
Gangwon Province moved to attract the integrated headquarters to revitalize the local economy. With many closed mining areas such as Taebaek, Samcheok, Yeongwol, and Jeongseon, the regional downturn has persisted, and population decline is severe, so it is promoting the integrated headquarters as a way out. Gangwon Province currently operates 10 coal-fired power plants, the third most after South Chungcheong (28) and South Gyeongsang (14).
An official at the Ministry of Climate, Energy and Environment said, "We have not yet reviewed the criteria for selecting the location of the integrated headquarters."
◇ Government to craft integration plan within the year… TF for the five generators launched
The government plans to prepare an integration plan within the year. In the interim results of a research project announced in the previous month for integrating the five power generation public corporations, options were presented for merging into one company or integrating two to three companies by region. The government is said to have settled on integrating into a single company, considering renewable energy investment, risk diversification, and operational efficiency.
Minister Kim Seong-hwan of the climate ministry met with the CEOs and senior management of the five power generation public corporations the previous day at the Han River Flood Control Office in Seocho District, Seoul, to discuss integration plans. They reportedly exchanged views on personnel systems following integration. With the government deciding to shut all coal-fired power plants by 2040, redeploying coal power personnel affiliated with the five power generation public corporations is seen as a key agenda item.
The five companies formed a task force (TF) with working-level staff and recently began operations. An official said, "Each company dispatched three people to form the TF, and we began full-fledged TF operations this week."
An official at the climate ministry said, "The TF will support practical tasks such as surveying each company's situation related to drawing up the integration plan."