South Korean Companies Adapt to New Power Plan

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Researched by Industrial Info Resources (Sugar Land, Texas)--As part of a new power plan introduced by the Ministry of Knowledge Economy (MKE) (Gwacheon, South Korea) early last year, South Korea intends to reduce the amount of power generated by natural gas from the current 20% to nearly 5% by 2022. The power plan also involves building a mix of 31 nuclear and thermal power plants between now and then, all while significantly increasing the amount of renewable energy-generating facilities. As of 2007, South Korea was the second-largest importer of natural gas, behind Japan. At the time, South Korea was importing more than 20 million metric tons per year from leading sources like Qatar, Indonesia, Malaysia and Oman.

Korea East-West Power Corporation (KEWP), part of Korea Electric Power Corporation (NYSE:KEP) (Seoul, South Korea), produces about 2,000 megawatts (MW) of electrical capacity via gas-fired plants. Through its power-generating facilities, it provides almost 13% of South Korea's electricity. KEWP owns the Ulsan Oil-Fired and Combined-Cycle Power Plant, which is approximately 400 kilometers southeast of Seoul, in Ulsan's petrochemical complex. The power plant is connected to the national grid via the Buk-Pusan substation between Ulsan and Pusan. Once the obsolete, oil-fired units 1, 2, and 3 have been retired, KEWP plans to incorporate a new combined-cycle unit on the same site that will be referred to as the New Ulsan Power Station. Set for commissioning in 2016, the $600 million New Ulsan Power Station will feature a combined-cycle unit capable of generating 700 MW of cleaner energy.

In Incheon, just to the west of Seoul, POSCO Engineering and Construction Company Limited (POSCO E&C), a subsidiary of POSCO (NYSE:PKX) (Pohang, Korea), is planning to construct a combined heat and power plant that will run on natural gas to produce about 200 MW and150 gigacalories per hour, and will be incorporated into the local grid. POSCO E&C plans to begin construction sometime during the second quarter of next year and is hoping to have the $400 million plant commissioned sometime late in 2013.

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