Doosan's Bold Move to Restructure Energy Business... Challenges Including Narrowing Technology Gap Remain

From Seobu Power LNG Gas Turbines
to Offshore Wind Turbines, Hydrogen, and SMR
Global Pursuit and Securing Core Technologies

Doosan Heavy Industries & Construction announced in June last year that it signed a supply contract for equipment with Korea Electric Power Technology for the Jeju Hallim Offshore Wind Power Project, the largest in Korea with a capacity of 100MW. The photo shows the Jeju Tamna Offshore Wind Power Plant with a capacity of 30MW. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] Doosan Heavy Industries & Construction, which has graduated from creditor management, is considering changing its name to 'Doosan Enerbility' for the first time in 22 years. The company has decided to stake its fate on new energy businesses such as liquefied natural gas (LNG), offshore wind gas turbines, hydrogen, and small modular reactors (SMR). The success of Doosan Heavy Industries' business restructuring is expected to have a significant impact on the 'Renewable Energy 3020' policy, which aims to convert 20% of the nation's energy generation to renewable energy by 2030.

According to the business community on the 1st, Doosan Group graduated early from the creditor management system after about two years. As of the 28th of last month, the creditor management system under the financial structure improvement agreement (MOU) between the creditors and Doosan Group was terminated. This came 1 year and 11 months after Doosan Heavy Industries urgently requested funds from the Korea Development Bank in March 2020, about a year earlier than the scheduled three-year period. Along with this, Doosan Heavy Industries is considering changing its name to Doosan Enerbility.

Graduating from creditor management does not mean that Doosan Heavy Industries' structural reform is complete. During the self-rescue plan process, several affiliates were sold, including Doosan Infracore for 850 billion KRW, Dongdaemun Doosan Tower for 800 billion KRW, Doosan Solus for 698.6 billion KRW, Doosan Corporation's Motrol business for 453 billion KRW, Club Mow CC for 185 billion KRW, and Neoplux for 73 billion KRW. This is why there is talk that it is time to accelerate efforts to secure core technologies for offshore wind and LNG gas turbines and to chase the world's number one markets such as Norway, as Korea's top energy parts company.

After overcoming the financial crisis, the group plans to accelerate its transition to an eco-friendly energy group centered on Doosan Heavy Industries' gas turbines and Doosan Fuel Cell's hydrogen fuel cell business. Doosan Heavy Industries aims to expand the proportion of renewable energy-related businesses to 60% by 2025. The gas turbine, developed as the world's fifth, is the core. The company is speeding up technology development with the goal of achieving annual sales of 1 trillion KRW in offshore wind power by 2025. Commercialization of SMRs is also a major business. To this end, it signed a memorandum of understanding for cooperation with NuScale Power, a U.S. nuclear power specialist company. For hydrogen, demonstration projects for hydrogen power generation using hydrogen turbines and ammonia co-firing are planned. Hydrogen fuel cell and hydrogen liquefaction plant businesses are also being prepared. The company plans to promote EPC (engineering, procurement, and construction) for solar power generation on salinized farmland and energy storage system (ESS) projects in Australia and the United States.

The technology gap with the world's top companies is not small. While Doosan Heavy Industries is pushing for commercialization of an 8MW offshore wind turbine, major global companies have long commercialized turbines of 12MW or more. According to industry and government sources, Korea has already emerged as one of the world's leading offshore wind markets. Securing the status of preferred negotiator for large Korean projects such as the Jeju Hallim offshore wind power project and the Southwest Sea offshore wind power project is an urgent priority. If a stable track record is not built, even high levels of technology development can face significant setbacks in prototype commercialization and profitability. A Doosan Heavy Industries official said, "Although the Incheon project was taken by Denmark's Ørsted, we will do our best to win Hallim and Southwest Sea projects," adding, "Accelerating new business technology development and securing core technologies is an urgent task."

In addition, the LNG gas turbine, expected to build a track record at Korea Western Power around next year, must also speed up. Hydrogen and SMR are still at the early stages of business entry, so there is a long way to go.

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