The South Korean government plans to reintegrate its five power generation companies, which were split in 2001 to introduce competition in the electricity sector. The new entity, named 'Korea Power,' is set to be established as a wholly-owned subsidiary of Korea Electric Power Corporation (KEPCO) and aims to officially launch in October 2027.
On September 4, the Ministry of Climate, Energy and Environment held a meeting at KEPCO's Southern Seoul headquarters to announce the plan for the consolidation of the five companies and the roadmap for implementation.
Since February, the government has been conducting research and gathering opinions from experts, labor unions, and stakeholders from the five companies. The research recommended that merging into a single entity would be the most suitable structure to enhance the effectiveness of energy transition and ensure a just transition while improving management efficiency.
According to the ministry, the combined power generation capacity of the five companies is approximately 53 gigawatts (GW), which would position the new company as the eighth largest power producer globally, and the fourteenth largest when including Chinese firms.
The government aims to consolidate the capital and workforce currently spread across the five companies to expand renewable energy initiatives and systematically pursue a just transition following the phase-out of coal power. By centralizing fuel procurement and investment in power generation facilities, the government plans to reduce costs and develop renewable energy and energy storage systems (ESS) on a large scale to achieve economies of scale.
The organizational structure will also undergo significant changes. The headquarters of Korea Power will consist of four divisions: the Renewable Energy Division, the Just Transition Division, the Safety Technology Division, and the Planning and Management Division. The current structure of five CEOs, five auditors, and ten executive directors will be streamlined to one CEO, one auditor, and four executive directors.
The workforce at the headquarters will decrease from over 2,400 to about 1,800. The remaining 600 employees will be assigned to three to four newly established regional renewable energy divisions, focusing on local renewable energy projects such as solar and onshore wind.
The existing regional thermal power divisions will maintain their current structure to ensure stable operations and safety at power plants. As coal plants are phased out or converted, the government will consider reallocating personnel in accordance with the principles of a just transition and may establish additional regional renewable energy divisions if necessary.
The location of the new headquarters has not yet been determined. The current headquarters of the five companies, located in Jinju, Boryeong, Taean, Busan, and Ulsan, each accommodate about 500 employees, making it challenging to house the consolidated workforce of 1,800 in one location. The government plans to decide on the headquarters location later, taking into account the current positions of the power companies, the impact of the just transition, and living and working conditions, in conjunction with the second public institution relocation policy.
The government will also initiate the drafting of a special law to facilitate the merger of the five companies. This law will include provisions for the establishment of Korea Power, the delegation of permits and approvals related to power generation, the succession of rights and obligations of existing companies, the simplification of merger procedures, and the alleviation of tax burdens. The government is also considering provisions to exempt the merger from antitrust reviews. The goal is to enact this special law during the regular session of the National Assembly this year.
Later this month, the ministry will form a 'Power Generation Company Integration Preparation Committee' chaired by the second vice minister. This committee will include representatives from the five companies, KEPCO, and sector experts to discuss the organizational structure, personnel allocation, operational systems, integration procedures, and overseas business opportunities for the new company.
Following the enactment of the special law, the Integration Promotion Committee will begin the formal integration process. The government aims to complete the registration of the new entity and the appointment of executives by September 2027, with the official launch of 'Korea Power' scheduled for October 1 of the same year.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.