Background of the Push to Integrate the Five Power Generation Companies and the Challenges of the Renewable Energy Transition

As the government pushes forward with a plan to combine the five power generation public corporations under Korea Electric Power Corporation’s subsidiaries—Namdong, Jungbu, Seobu, Nambu, and EastWest Power—discussion continues over the background and effects of the merger. This plan stems from the judgment that the competition and privatization effects expected at the time of the earlier split were not significant, and that greater investment capacity is needed as the power industry shifts toward renewable energy. The government believes the merger could help expand investment in renewable energy projects, reduce costs through joint purchasing of fuel and maintenance supplies, and facilitate workforce reallocation following the phaseout of coalfired power generation. The tentatively named “Korea Power Generation” is planned to include a Renewable Energy Headquarters and a Just Transition Headquarters, and it will also pursue renewable energy projects by region. However, concerns are not small either. Experts point out that since the current main power sources of the generation companies are coal and gas, it is uncertain whether a simple merger alone will create an incentive to expand renewable energy. There are also opinions that if the merged entity is excessively favored within the structure in which KEPCO operates the transmission and distribution network, private renewable energy developers could face disadvantages in connecting to the grid.