[New Year's Message] Kim Jong-gap, KEPCO President: "KEPCO Must Participate in Renewable Energy Generation to Achieve Carbon Neutrality by 2050"

"Year One of Sustainable Management through Financial Stability"
"Strict Evaluation Criteria Applied to Prevent Moral Hazard"

Jong-gap Kim, President of Korea Electric Power Corporation. (Photo by Korea Electric Power Corporation)

[Asia Economy Reporter Moon Chaeseok] "To achieve carbon neutrality (net zero carbon emissions), a global trend, by 2050, I believe Korea Electric Power Corporation (KEPCO) must directly participate in renewable energy power generation projects."

On the 4th, KEPCO President Kim Jong-gap said in his New Year's address, "Let's lead eco-friendly low-carbon projects more actively this year."

Until now, KEPCO has purchased electricity from power producers at wholesale prices and resold it to consumers, without directly generating electricity.

This time, President Kim directly stated that KEPCO should also be able to participate in large-scale new and renewable energy generation projects such as offshore wind power.

Some welcome this, expecting it to contribute to accelerating the government's energy transition, while others worry about KEPCO's potential monopoly.

President Kim emphasized, "To achieve carbon neutrality by 2050, KEPCO must directly participate in renewable energy power generation projects," adding, "We need to make proactive investments to enable power producers to connect to the grid more easily and enhance grid stability."

He stressed the need to improve financial stability this year. Despite increased uncertainty due to the COVID-19 pandemic last year, KEPCO achieved significant financial improvement by escaping losses for two consecutive years. There are even forecasts that KEPCO is on the verge of turning a profit for the first time in three years.

President Kim encouraged employees, saying, "Let this year be the first year KEPCO begins sustainable management through financial stability," and "The foundation has been laid with the newly introduced 'cost-linked electricity tariff system.'"

He also said, "There are concerns that KEPCO might fall into moral hazard," and emphasized, "All the more reason for us to apply strict evaluation indicators and thoroughly manage costs."

Earlier, on the 17th of last month, KEPCO finalized and announced a tariff system reform plan that reflects cost fluctuations such as international oil prices in electricity rates. The reform plan includes the government's intention to strengthen management and supervision of KEPCO and its power group companies' cost management.

According to the reform plan, KEPCO plans to set the upper limit of the power supply cost increase rate at 3% for the next five years, aiming to save about 7 to 8 trillion won. It also decided to make the annual comprehensive cost verification of electricity rates, currently conducted once a year, a continuous process.

In addition, President Kim emphasized establishing a desirable governance structure across the entire group at the level of KOSPI-listed companies, reducing approval steps, creating a new corporate culture to prepare for uncertainties, and becoming a "model company" that secures both profitability and public interest.

He said, "Let's dream together in the new year," and added, "'The most respected public enterprise by the people,' 'the world's most competitive power utility.' If we work together, we can surely achieve this."

A view of the Korea Electric Power Corporation headquarters in Naju, Jeollanam-do. (Photo by Korea Electric Power Corporation)

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