KEPCO, Gov’t study floating price system based on wholesale price movements: President Kim
President Kim Jong-gap of Korea Electric Power Corp. (KEPCO) discusses bilateral ways of promoting cooperation in industry and technology areas with Dr. Al-Sultan of K.A.CARE during the former’s recent visit to Saudi Arabia.
President Kim Jong-gap of Korea Electric Power Corp. (KEPCO) said five contenders in an international bidding to build nuclear power units in Saudi Arabia will be shortlisted to a few contenders by March, before a preferred negotiation is to be determined by year-end.
“We believe we’ve made a good impression on Saudi Arabia in its demands to nurture local manpower and collaboration with local concerns,” KEPCO President Kim said in a meeting of reporters on Jan. 29. KEPCO was devoting itself to winning the order, he added. Saudi Arabia wants to build two nuclear power units at a cost of an estimated 22 trillion won.
The commercial operation of the Barakah Nuclear Power Plant, being built by KEPCO in the United Arab Emirate, may be delayed two years as planned due to different conditions from Korea’s, such as the desert climate, he noted.
As for the nuclear power project in the UK, President Kim said KEPCO was watching with concern. President Kim said KEPCO was studying with the government an option to introduce a floating price system in which electricity charges are determined according to wholesale price movements.
The wholesale floating price regime refers to the reflecting of diverse “policy costs” on top of costs of purchasing fuels such as coal and liquefied natural gas.
The value of electricity amounts being sold lower than the unit price in 2018 stood at 4.7 trillion won. In particular, policy costs soared to 6 trillion won last year, 1.2 trillion won more than the previous year, and the figure will jump to 7 trillion won this year, he said. Currently, unit prices are inclusive of policy costs such as subsidies offered to power companies which meet renewable portfolios standards and demand response costs for independent power producers.
Kim stressed the rationalization of the distorted electricity price regime by reflecting unit prices. A progressive price system for households and preferential pricing system for industry uses during the deal of night will be restructured in the first half before they are put into force in the second half, Kim said.
KEPCO and the government were considering abolishing a system of giving a discount of 4,000 won to each household consuming 200kWh or less monthly. The restructuring of the progressive pricing system for households would raise electricity charges of some 9.56 million households who belong to the first phase charging category, President Kim said. Only households who need support will be given cash, he added.
A view of KEPCO headquarters in Naju, Jeollanam-do. (Photos: KEPCO)
KEPCO Strives to Lead Energy Shift, Digital Transformation
President Kim Jong-gap of Korea Electric Power Corp. (KEPCO) held a ceremony to kick off the 2019 business year with executives and staffers in attendance at KEPCO’s headquarters in Naju, Jeollanam-do, on Jan. 2. He called for everyone to make efforts to catapult KEPCO to a global digital transformation leader.
“First, I call for becoming a company leading energy shift and digital transformation. Let’s make all-out efforts to aggressively enter new and renewable power generation businesses and ensure smooth connection of new and renewable grids. Let’s make this year a year in which we can make practical achievements by flesh out on detailed action plans to become an energy platform company.
“Second, I call for being the world’s top utility group and enhancement of KEPCO’s prestige.“Third, I call for becoming a corporation ardently beloved by people and investors by shoring up ethics management and management transparency,” he said.