a1 dongbu green power 6000mw plan

13. 5. 27. Korea Joongang Daily

koreajoongangdaily.joinsmsn.com/news/article/option/article_print.aspx 1/4

Governments decision to open doors sees surge in conglomerate interest

NEWS IN FOCUS

Apr 30,2012

Thermal plants a hot investment

With the governments

decision to open doors to

private companies to build

thermal power plants as a

measure to prevent power

shortages, related businesses

have been jumping on

upcoming projects one after

another due to their high

profitability.

Conglomerates are vying for

inclusion in an energy

complex project in

Samcheok, Gangwon, where

they can construct coal-fired

power plants that are low in

cost and high in profitability.

With Samsung C&Ts latest challenge to join the project, a total of five

companies are competing to get the two tickets to the energy complex.

The Samcheok project is part of the citys long-term goal to become an

energy mecca. The city plans to propose its power generation business to

the sixth power supply plan, which will be announced at the end of the year

by the Ministry of Knowledge Economy.

Following the path set by STX Energy and Posco Energy last year, Dongbu

Group and Tong Yang Group inked MOUs with the city on Tuesday and

Samsung C&T plans to clinch the deal next month.

Dongbu is planning to create a clean-energy complex dubbed Green

userHighlight



Samcheok Enertopia, including an eco-friendly coal-fired power plant with

a 6,000-megawatt capacity on a 2-million-square-meter (21.5-million-

square-foot) land by 2022.

The group is pushing to build a 1,000-megawatt thermal power plant in

Dangjin, South Chungcheong, by 2015. The Dangjin plant will become the

first independent power plant based on coal to be built by a private

company.

Building a thermal power plant using coal takes a shorter amount of time

than building nuclear plants, said Yoon Hyung-gang, an official at Korea

Electric Power Corporation (Kepco).

It is forecast that private companies would see about 50 percent in the

sales-to-operating profit rate from selling power made from coal, Yoon

said. He added that the percentage is outrageous given that Samsung

Electronics recorded 9.7 percent last year.

The price of electricity is determined based on the price of power made

from liquefied natural gas (LNG) in the Korean market, the Kepco official

explained.

LNG is priced at 132 won ($0.11)per kilowatt-hour in the market, making

the consumer price for all types of power 133 won. However, the

production cost of power from coal is 67 won, which means the companies

will reap in bigger earnings, he said.

Tong Yang Power, a new thermal power subsidiary of Tong Yang Group, is

making an all-out effort to build a plant. It plans to construct a 4,000-

megawatt plant with an 11 trillion won investment on land where a mine

run by Tong Yang Cement is located.

STX Energy and Posco Energy, meanwhile, signed a 7 trillion won and an 8

trillion won deal, respectively, earlier this year.

Notably, some engineering and construction (E&C) companies are also

making moves to build thermal power plants in order to be included in the

governments power supply plan.

According to the Korea Power Exchange, nine private E&C companies have

revealed their intention to build 21 million kilowatts of power plants.

userHighlight



Dongyang E&C, Hanyang E&C and Keumho E&C want to enter the power

market, an official at KPX said.

These newcomers are preparing to start the power businesses by joining

forces with other firms.

Dongyang E&C plans to form a consortium with GS Power to build two 1-

million-kilowatt thermal power plants. SK E&C and Samsung C&T are

cooperating with Korea South East Power to build two 1-million-kilowatt

thermal power plants each.

Industry officials say the power plant business is gaining in popularity as a

new growth engine for E&C companies that have faced declining orders in

their original business area.

Builders are turning their eyes to coal-fired power plants, because costs to

generate power at a thermal power plant are comparatively low, ensuring

profitability, an insider said.

He projected that E&C companies would continue to participate in the

power market.

However, he pointed out one of their concerns: Building a thermal power

plant faces opposition from residents in the region, so companies need to

make plants greener, the official said.

Across the country, there are 45 coal-fired power plants and about 10 more

plants are being confirmed to be constructed, according to data compiled by

KPX.

Power industry officials say, the Knowledge Ministry is mulling over a

measure to build additional coal-fired power plants with a total capacity of

22,000 megawatts.

If the measure is included in the sixth power supply plan at the end of the

year, Korea will have 11 times greater volume of electricity produced out of

coal in comparison with the fifth plan.

The government renews the power plan every two years.

Worries about blackouts in the summer and winter appear repeatedly as

supply is failing to catch up with demand, an official at the ministry said.



1 .. !!

!

82kg 47kg ~~!?

?

?

82kg 47kg ~~!?

10

The official said the government is considering increasing the number of

coal-fired power plants as a practical solution.

By Song Su-hyun [[email protected]]

a1 dongbu green power 6000mw plan

Documents