orea Electric Power Corp. (KEPCO) proposed that electricity charges should be raised by 10.7 percent to recoup a loss the Korean utility company will suffer during the current business year due to the gap between electricity production costs and charges.

KEPCO held a board of directors meeting on July 9 and approved a proposal calling for introducing a floating fuel cost mechanism for determining electricity charges. KEPCO made the proposal to the government, claiming that the reality in which secondary power fares are lower than primary petroleum and coal prices has fanned energy overconsumption, distorting the power demand situation, and suggesting the nation should pursue the low-carbon, green growth paradigm through the realization of electricity charge.

KEPCO predicted that the raising of electricity charges will cut down on energy overconsumption and prompt businesses to develop highly-efficient equipment and systems and new technologies, thus contributing to creating jobs for related industries. 

But the government recommended that KEPCO hold the increase in electricity charges to less than 5 percent in consideration of its effects on general price hikes. On July 17, KEPCO received a document from the Electricity Regulatory Commission, which demanded that raising electricity charges by steeper margins should be put off until general price conditions and the global economic situation are restored to stable levels.

During the board of directors’ meeting, KEPCO made it clear that the utility company will not reflect the accumulated losses it had suffered due to the gap between electricity product cost and charges during the previous business years while considering the electricity charge raise, and the company will save more than 1.1 trillion won in product cost reduction during this year as part of efforts to recoup the losses. 

As to production cost reduction, KEPCO said it plans to save 183 billion won in the engineering sector by improving design standards through the introduction of new engineering methods and taking other steps; 190 billion by reforming purchase and procurement procedures; 122.9 billion won by innovating construction and operation; and 641.6 billion won through self-salvage efforts on the part of six power companies. 

Thanks to its own production cost reduction efforts, KEPCO saved 1.407 trillion won in 2008, 1.383 trillion won in 2009, 1.576 trillion won in 2010 and 1.357 trillion won in 2011. 

WORLD-CLASS GREEN TECH PLAYER 

KEPCO is devoting itself in tiding over the difficult business conditions by innovating its green R&D projects, commercializing green technologies and expanding global green businesses. 

KEPCO aims to increase its sales from the green business sector to 14 trillion won by 2020, a 700-fold jump from the current 20 billion won. 

To this end, KEPCO plans to invest 2.8 trillion won in exploring the top eight green technologies in order to gain green growth momentum. The top eight tasks the Korean utilities company will implement include integrated gasification combined cycle (IGCC); carbon capture and storage (CCS); smart grid; EV charging infrastructure; homegrown technology for nuclear power units; all-electricfied homes; high-voltage direct current (HVDC) transmission; and super-conducting technology. 

The utility company strives to build a smart grid, a combination of electricity facilities and IT, while concentrating on the development of low-carbon, power-generation technology and high-performance power transmission technology. 

In particular, KEPCO has gained ground in exporting its homegrown nuclear power technology, suggesting the new paradigm for exports, job creation, and exploring resources abroad. Korea won the UAE nuclear power plant project, outbidding global nuclear powers and exporting its homegrown nuclear power model, about 30 years after the country introduced foreign nuclear power technology. The project calls for the construction of four APR1400 reactors at a cost of $20 billion, the highest-ever export figure. Korea’s possible participation in the operation of the upcoming nuclear power units could yield another $20 billion.