KEPCO Sales Headquarters Choi Young-sung (right) and Hong Hye-ran, Secretary General of the Energy Citizens’ Alliance, are signing a business agreement at KEPCO’s Gyeongin Construction Headquarters to jointly promote energy conservation and carbon neutrality. News 1
KEPCO turned to a surplus after three years. This is because electricity purchase costs have significantly decreased amid the trend of low oil prices.
On the 19th, KEPCO announced on the 19th that it recorded KRW 58 trillion in consolidated sales and KRW 4.4 trillion in operating profit, respectively. KEPCO recorded operating deficits of 200 billion won and 1.3 trillion won respectively in 2018 and 2019.
An official from KEPCO said, “International fuel prices declined in the aftermath of the novel coronavirus infection (Corona 19), and KEPCO’s fuel costs for power generation subsidiaries and power purchase costs for private power generation companies decreased by 6 trillion won from 36 trillion won in the previous year to 30 trillion won last year. It was the main reason.” Specifically, the fuel cost of the KEPCO subsidiary decreased by 3.5 trillion won compared to the previous year due to the decline in fuel prices such as oil prices and bituminous coal prices, and electricity purchase costs decreased by 2.5 trillion won due to the decline in liquefied natural gas (LNG) and oil prices.
In an earnings conference call on the same day, KEPCO predicted that this year’s electricity demand and purchase volume will be “power demand will grow 2% from the previous year and the purchase volume will be similar to the previous year as the domestic and overseas economy recovers.” The proportion of power generation facilities is expected to be around 40%, similar to that of the previous year, for nuclear power plants, to 50% for coal, and 7-8% for LNG.
KEPCO said about this year’s management strategy, “We will reduce the cost of electricity supply by improving management efficiency along with the reorganization of electricity rates, minimizing the factors for raising electricity rates and continuing to promote profit improvement.” KEPCO also decided to continue to increase investment in transmission and distribution and consider issuing a green bond again this year. Green bonds are bonds that can only be used to raise funds necessary for environmentally friendly investments. Last year, KEPCO’s transmission and distribution investment cost was 6.2 trillion won, and the amount of investment planned for this year and next year is 6.40 trillion won and 7 trillion won, respectively.
On the other hand, KEPCO reiterated its position that “direct investment is necessary” regarding the controversy that damages the neutrality of the power grid raised by some in relation to the’entering the new and renewable energy power generation business’. A KEPCO official said, “Renewable energy-related information is still transparently disclosed to the outside through the system. It is advantageous in terms of capability and business feasibility to directly invest in a separate KEPCO corporation rather than a special purpose corporation (SPC).” said.
Hyunwoo Kim reporter [email protected]
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