Announcement Likely on Strengthening Gas Turbine Competitiveness in September... Initiating Localization

Photo by Doosan Heavy Industries & Construction

[Asia Economy Reporter Moon Chaeseok] The government is set to announce as early as next month a plan to expand the localization of Doosan Heavy Industries & Construction's (Doosan) liquefied natural gas (LNG) gas turbine equipment by installing it in domestic power plants.

According to energy industry insiders and power producers, a plan related to a turbine operation demonstration testbed between Korea Western Power and other power companies and Doosan is expected to be announced as early as next month.

Earlier in February, the Ministry of Trade, Industry and Energy launched the public-private 'Korean Standard Gas Combined Cycle Commercialization Promotion Group' and announced it would prepare a 'Gas Turbine Industry Global Competitiveness Enhancement Plan' within the first half of the year.

The plan will include measures to strengthen localization by activating standardization of Doosan's gas turbine designs, development of main and core components, and demonstration testbeds between Doosan and power producers.

An official from the promotion group said, "It is currently difficult to disclose which power company plans to conduct a demonstration testbed with which Doosan turbine," adding, "We are accelerating discussions aiming for an announcement next month."

The key issue is how many testbed cases can be created. For commercial operation, the turbine must run without failure for over 8,000 hours at temperatures above 1,500 degrees Celsius.

The only publicly known case so far is the plan to install Doosan's H-class (270MW) turbine at Korea Western Power's Gimpo combined heat and power plant, scheduled for completion in June 2023.

The environmental impact assessment report related to the Gimpo combined heat and power plant installation was submitted to the Ministry of Environment's relevant department on the 11th, and a conclusion on construction is expected by mid-October at the earliest. If approved by the Ministry of Environment, construction will begin around November.

From Doosan's perspective, it must secure orders from as many domestic power companies as possible beyond Korea Western Power. However, power companies, considering management efficiency, must carefully evaluate how competitive Doosan's equipment is compared to foreign products such as General Electric (GE), Siemens, and Mitsubishi.

An official from a power company said, "We are currently discussing whether to install Doosan's next model, the S2-class (380MW) turbine, expected to be developed around 2023, rather than the H-class turbine."

According to Son Jeongrak, MD of the R&D Strategy Planning Group at the Ministry of Trade, Industry and Energy and head of the Gas Turbine Development Promotion Group, domestic gas turbine development technology currently stands at about 55% of that of leading overseas companies, with a technology gap of 3 to 5 years. It is expected to reach 95% by 2024.

Son MD explained, "Depending on the speed at which the capabilities of Doosan and about 300 related companies improve, the estimated 3 to 5-year gap could be shortened further," adding, "Even now, the gap, which was over 20 years just a few years ago, is rapidly closing."

Besides the technological competitiveness of Doosan's equipment compared to foreign products, delays in the government's energy policy announcements are also reasons for the postponement of the gas turbine localization plan announcement.

The 9th Basic Plan for Electricity Supply and Demand (9th Basic Plan) was supposed to include plans related to the testbed, but its announcement has been delayed due to the Ministry of Environment's strategic environmental impact assessment.

An official from the Ministry of Trade, Industry and Energy said, "It is difficult to disclose now which power company will conduct a demonstration testbed project using Doosan's turbines and by when," adding, "Although there is a connection between the 9th Basic Plan and the plan, it has not been decided whether to announce them together or to announce the plan first."

He continued, "We are aware of criticisms that if the 9th Basic Plan reduces the share of coal and nuclear power, we will have to rely on expensive foreign LNG equipment until the intermittency and supply stability of new and renewable energy improve," adding, "We are reviewing which approach would be more effective in sending signals externally."

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