[Issue] Where Should the Headquarters Go After Merging the Five Power Generation Companies?... Why 'Energy Capital' Naju Is in the Spotlight

Cluster of KEPCO, Korea Power Exchange, KDN, and KPS
Full-cycle Integration: Generation, Transmission/Distribution, Trading, and Maintenance
Synergy with 700+ Energy Valley Companies and KENTECH
Robust Completion of the Future Energy Industry Ecosystem
A Strategic Location for Corporate Restructuring and Balanced National Development

As the government moves forward with efforts to integrate the five power generation companies, attention is naturally shifting to what happens "after integration." The issue of where to locate the headquarters of the newly combined power generation company has emerged as a crucial factor that could shape the future landscape of South Korea's energy industry, just as important as how these five public power companies will be brought together.

If the decision on the integrated headquarters is approached solely as a competition to attract a public institution, it could easily devolve into a struggle between regions where the current power generation companies are located. However, if the purpose of integrating the five power companies goes beyond simply reducing overlapping functions and extends to restructuring the generation industry to achieve carbon neutrality, expand renewable energy, implement RE100, develop distributed energy, enhance the power grid, and meet surging electricity demand in the AI and data center era, then the standards for selecting the headquarters location must also change.

Rather than focusing on "which region gets to have it," the primary consideration should be "where the integration will yield the greatest synergy."

A panoramic view of Bitgaram Innovation City in Naju, which is gaining attention as the optimal site for the integrated headquarters relocation of the five power generation companies. Provided by Naju City

From this perspective, Bitgaram Innovation City in Naju, located in the Gwangju-Jeonnam Special Integrated City, is emerging as a strong candidate. Naju's greatest strength lies not in being a city that needs to build new infrastructure from scratch, but rather in already being a hub where the core functions of Korea’s power industry are concentrated.

Bitgaram Innovation City is home to Korea Electric Power Corporation (KEPCO), which sits at the heart of the country's power sector; Korea Power Exchange, which operates the power market; KEPCO KDN, responsible for energy ICT; and KEPCO KPS, which handles maintenance of generation and transmission equipment.

If the headquarters of the integrated power generation company is established in Naju, the currently missing "generation" function will be added, creating an integrated cycle for the entire power industry within a single zone—from generation, transmission and distribution, and electricity trading to equipment operation and maintenance, and energy ICT. This constitutes Naju’s unique competitive advantage over other regions.

This is not simply about adding another public institution. If the power generation company, KEPCO, Korea Power Exchange, KPS, and KDN perform the core functions of the national power industry in close geographical proximity, it will significantly improve inter-agency collaboration and decision-making efficiency regarding increasingly complex national energy challenges—such as power supply and grid operation, generation mix, renewable energy grid connectivity, and construction of next-generation power networks.

In particular, given that the weight of the power generation industry is shifting from traditional sources such as coal and LNG to renewables like solar and offshore wind, as well as energy storage systems (ESS), distributed energy, and next-generation power grids, Naju's locational competitiveness stands out even further.

Key energy public institutions such as Korea Electric Power Corporation, Korea Power Exchange, KEPCO KDN, and KEPCO KPS are concentrated in Naju Bitgaram Innovation City. Provided by Naju City

Jeonnam Province, where Naju is located, is South Korea's representative renewable energy production region, boasting abundant solar and offshore wind resources. If large-scale renewable energy development and concurrent power grid expansion take place, cooperation between power generation firms and grid/market operators will become incomparably more important than now.

Moreover, Naju has a dense cluster of energy institutions, including Korea Institute of Energy Technology (KENTECH), various universities and research centers, energy-related special districts, and around 700 Energy Valley companies. If Jeonnam is where large-scale renewables are produced, Naju acts as the "energy brain"—the place that connects these resources to the grid, market, technology development, and industry.

If the integrated power generation company also establishes its headquarters in Naju, Jeonnam's renewable energy resources, Naju's energy public institutions, KENTECH's research and talent base, and the industrial capabilities of Energy Valley companies will all be linked. This means the future energy industry ecosystem—spanning energy production, grid and trading, research and development, and commercialization—could be completed here.

Since 2018, Naju City has championed the vision of becoming Korea's "energy capital," investing in fostering new energy industries, research and development, attracting companies, and training professionals. The integrated power generation company would serve as the final piece connecting the energy industry infrastructure that Naju has individually built up.

Placing the integrated headquarters in Naju also aligns with the national goal of balanced regional development. The purpose of relocating public institutions out of the Seoul Metropolitan Area is not just to change the administrative address. It is about establishing self-sustaining local growth hubs where companies, research entities, universities, and talent cluster around core public agencies, spawning new industries and jobs.

Bitgaram Innovation City, the only joint innovation city between Gwangju and Jeonnam in the nation, has already proven this model. Since the relocation of KEPCO and 16 other public institutions, energy-related companies have flocked to Naju, and with Energy Valley and KENTECH, the city has grown from a mere relocation site for public institutions to a specialized energy industry city.

If the headquarters of the integrated five power companies is added, the resulting impact will go far beyond the simple move of one company. It is expected to trigger an industrial virtuous cycle—attracting more related firms and partners, additional investment, expanded R&D, influx of talented professionals, and the creation of quality jobs.

For the government, the integration of power generation companies provides a strategic opportunity to connect "innovation in the public sector" with the national agenda of balanced regional development by forming new growth engines outside of the capital region.

Concerns about employee relocation due to the headquarters move can also be addressed with the experience Naju has accumulated over the past decade. Since public institutions moved in, Bitgaram Innovation City has continually expanded infrastructure for education, culture, healthcare, and sports, and has a proven track record of supporting the settlement of relocated employees and their families. Naju City has received the top prize, two years in a row, for improving living conditions in evaluations of innovation city cooperation efforts.

Ultimately, this indicates that the integrated headquarters location should not be approached as a question of "regional allocation" or simply choosing among the existing locations of the current power generation companies.

If the objective of merging the five power companies is not just cost savings and improved efficiency but also transforming Korea’s power generation sector into a future-oriented energy industry, then the headquarters should be situated where that transformation can be realized most rapidly and effectively.

In this context, Naju's competitiveness is clear: it offers the synergy of adding the generation function to core energy institutions such as KEPCO, Korea Power Exchange, KPS, and KDN; combining the research and talent of KENTECH; leveraging the industrial vitality of Energy Valley companies; and making use of Jeonnam’s vast renewable energy resources.

By deciding the headquarters site based on the functions and roles of the upcoming integrated company—rather than on the current locations of existing companies or their institutional interests—Naju's advantages as a hub become unmistakably prominent.

Yoon Byung-tae, mayor of Naju City, issued a statement on the 14th regarding the attraction of the integrated headquarters of the five power generation companies to Naju. Photo provided by Naju City

This is why Mayor Byungtae Yoon of Naju City has been actively working to attract the headquarters since the earliest discussions on the integration of the five power generation companies.

In a recent statement, Mayor Yoon emphasized, "The integration of the five power generation companies must not simply be about merging five corporations, but about turning Korea’s power generation industry into a future-oriented national energy project," adding, "Naju, where power generation, transmission and distribution, power markets, research and development, and corporations are concentrated, is the optimal city to lead the new era of the integrated power company."

He further emphasized, "We strongly urge the government to consider the future of Korea's energy industry and the value of balanced regional development as a whole and to place the integrated headquarters in Naju. Together with our 120,000 citizens, we will provide every possible support for the successful establishment and stable settlement of the integrated power company."

In the end, the real issue in integrating the five power generation companies is not just "how to merge the five entities." We must also consider how the integration will change Korea's power generation industry, and where to establish the center of the future energy sector. If the integration of the five companies marks a new starting point for Korea’s energy industry, the headquarters must also be decided based on future competitiveness, not outdated industrial structures or regional interests.

The key question for the government is not "where to allocate," but "where can we realize the greatest future potential?" To this, Naju answers with its already established ecosystem of power industry infrastructure, R&D, companies, and renewables.

An official from Naju City commented, "Attracting the headquarters of the integrated five power companies should not be seen as simply bringing in another public institution, but as completing Naju’s energy industry ecosystem built around KEPCO, and enhancing the future competitiveness of Korea’s power generation industry from a national perspective. The ability to connect KEPCO, Korea Power Exchange, KDN, KPS, KENTECH, and Energy Valley companies with Jeonnam's rich renewable resources is Naju’s unique strength."

The official added, "If the integration of the five power generation companies is the new starting point for Korea’s energy industry, then the location of the headquarters must be decided not by institutional or regional interests, but by where integration will create the greatest synergy going forward."

This content was produced with the assistance of AI translation services.