Transfer of Pumped-Storage Generation Raised Amid Launch of Integrated Power Company... Government Says "Discussion Is Open"

Ministry of Climate Holds Meeting on Power Generation Company Integration Plan

Power Generation Industry Union Stresses Need to Transfer Pumped-Storage Operations

National Power Industry Labor Union: "Public Offshore Wind Power Projects Must Be Greatly Expanded"

Lee Jungbok, President of Korea Western Power: "R&D Institute Needed in Integrated Headquarters"

On the 4th, at the Korea Electric Power Corporation Namseoul Headquarters in Yeongdeungpo-gu, Seoul, Kim Sung-hwan, Minister of the Ministry of Climate, Energy and Environment, is speaking at the meeting on the integration plan for power generation public enterprises. Ministry of Climate

As the government plans to launch an integrated power generation public enterprise in October next year, the transfer of pumped-storage generation has emerged as a new issue. The power generation public company union, which had previously focused on discussions over the establishment of the integrated power generation company, is now advocating for the transfer of pumped-storage generation—a work currently under Korea Hydro & Nuclear Power—to the new integrated company. In response, the Ministry of Climate, Energy and Environment, which oversees this matter, stated that "the discussion is open."

Moon Yang-taek, Director of Power Industry Policy at the Ministry of Climate, Energy and Environment, said at a meeting on the integrated plan for power generation public enterprises held at Korea Electric Power Corporation's Namseoul Headquarters on the 4th, "Transferring pumped-storage generation involves taking over a business currently under Korea Hydro & Nuclear Power and has not been related to the integration of the power companies, so it has not been reviewed until now," adding, "We will keep open the possibility for review in the future."

On the same day, Chae Yong-soon, Chairman of the Korea Power Generation Industry Labor Union, argued, "The function of pumped-storage generation has shifted from nuclear power to the utilization of renewable energy," insisting that the work of pumped-storage generation should be transferred to the integrated power company.

In 2001, with the restructuring of the electric power industry, pumped-storage functions were separated from Korea Electric Power Corporation and assigned to each of the five generation subsidiaries. However, in 2011, the Ministry of Knowledge Economy (now the Ministry of Trade, Industry and Energy), after a research service by KDI, decided to integrate pumped-storage operations into Korea Hydro & Nuclear Power. This was due to the public nature of pumped-storage, the enhancement of expertise through integrated management, and other reasons.

Since then, pumped-storage generation has utilized surplus power from nuclear generation to store water, generating electricity during periods of high demand, thereby contributing to grid stability. However, as the share of renewable energy increases, the function of pumped-storage generation in supporting grid stability has become more closely tied to renewable energy. Furthermore, with the integration of the five generation companies, the previous grounds for transferring the business to Korea Hydro & Nuclear Power have disappeared.

At the meeting, power generation labor unions demanded an expansion of renewable energy project volume, securing a workforce for energy transition, and succession of employment conditions.

Choi Chul-ho, Chairman of the National Power Industry Labor Union Federation, stated, "If the integrated power generation public enterprise is to be responsible for the energy transition, it must first be given practical projects it can actually carry out," and suggested that there is a strong need to greatly expand the public-led project volume in offshore wind power bidding. He also called for the establishment of a specialized educational institute for the power generation industry, such as an Energy Transition Talent Development Center, and requested special quotas and wage bill exceptions for energy transition needs.

Executives of power generation public enterprises also emphasized the need to expand the role of the integrated power generation company.

Lee Jung-bok, President of Korea Western Power, stressed, "A research and development (R&D) institute should be operated within the integrated headquarters so that technology can be developed in artificial intelligence (AI), carbon neutrality, renewable energy, and power plant operation." He also noted, "Each power company needs to reorganize the 50-plus overseas business portfolios currently being pursued worldwide," adding, "Now, the power generation business must reinforce system integration (SI) and reestablish itself as a service industry."

Lee Young-jo, President of Korea Midland Power, said, "We must raise morale among our members and create a work environment where they can work confidently," emphasizing that "succession of employment and job security must be ensured."

The integration of the five power generation companies would create a massive company with a workforce of 13,659 employees and 53 GW of power generation facilities. The combined assets of the companies would amount to 67 trillion won—surpassing major conglomerates like Hanjin, which has approximately 62.47 trillion won in assets.

To facilitate a prompt integration, the government plans to enact special legislation to streamline permit processing and simplify merger procedures. Exemption from business combination review is also under consideration. However, some express concern that the dominant position of the new mega power company in the market could restrict competition as its market power expands.

Regarding this, on the same day, Kim Sung-hwan, Minister of the Ministry of Climate, stated to reporters, "If coal-fired power generation were to continue, the integrated power company could be viewed as a market dominant operator. However, as the transition now is from coal-fired power to a renewable energy-focused company through this integration, it should not be considered a market dominant company."

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