[Feature] Stagnant Offshore Wind Sector Leaves a Gap... "Hydropower and Pumped Storage Are the Best Alternatives"

[Energy Industry in Crisis] ③ A National Decision Is Needed Now

Yeongdong Pumped Storage "Conditional Contract" Opens the Door to Technological Self-Reliance

Window of Opportunity Will Close if Funding Is Cut, Cheap Imports Flow In, or Ordering Parties Turn Away

If Government, Ordering Organizations, and Industry Fail to Align, Orders Will Go to Overseas Competitors

Starting in 2026, more than 3 trillion won worth of large-scale orders are expected in the domestic hydropower equipment market over the next decade. The order plans unveiled by Korea Hydro & Nuclear Power and the Korea Hydropower Association at the 2nd Hydropower Day event in November 2025 have injected new hope into the industry. As demonstrated by the precedent of the Yeongdong Pumped Storage Power Plant, the groundwork for localization through technology partnerships has been established. However, there are still key policy challenges that must be addressed before this “window of opportunity” closes.

The Yeongdong Pumped Storage Power Plant, for which civil engineering work began in September 2024, marks the first new pumped storage project in 15 years since the 2011 Yecheon Pumped Storage Power Plant. Doosan Enerbility won the main equipment supply contract in June 2025, valued at 330 billion won, participating under the condition of receiving a technology transfer from Andritz. This “conditional contract” approach is significant as it has proven a pathway for domestic companies to internalize core technologies.

Bidding is currently underway for two Hongcheon pumped storage pump-turbines, and a series of pumped storage power plants are scheduled for construction in Pocheon, Hapcheon, and Yangyang. If Doosan Enerbility consecutively undertakes these projects, a structure for technological self-reliance can be established. The internalization of core technologies by large companies also invigorates the industrial ecosystem by benefiting related small and medium-sized enterprises.

Experts emphasize that four key policy issues must be resolved to seize this opportunity.

First, project budgets need to be rationalized. Stable funding at levels that meet the requests of localization-oriented companies must be secured. A lack of funding disrupts continuity in technology development and ultimately threatens the survival of companies. Budget planning should cover the entire project cycle, not just provide one-off support.

Additionally, conditions guaranteeing the participation of domestic company consortia must be maintained. As in the Yeongdong Pumped Storage case, the participation of domestic company consortia should be explicitly stated in bid requirements. To achieve localization through technology partnerships, the role of domestic firms must be secured from the ordering stage.

It is also essential to prevent the influx of low-priced products via the World Trade Organization (WTO) Government Procurement Agreement (GPA) system. By actively utilizing the principle of mutual opening under the WTO GPA, indiscriminate entry of overseas low-cost equipment—produced based on relatively low manufacturing costs—should be restricted to prevent disruption to the domestic industrial ecosystem.

Ordering and operating organizations, such as Korea Hydro & Nuclear Power and Korea Water Resources Corporation, must demonstrate a proactive commitment to expanding localization. Localization of hydropower facilities, which are national infrastructure, cannot be achieved solely by corporate efforts; national support is required from an energy security standpoint.

Ultimately, there are clear reasons why localization of hydropower equipment is challenging. The absence of fundamental technologies, the limitations of the domestic market, discontinuity in funding, and difficulties in securing corporate profitability are all intricately intertwined.

However, the large-scale market opening this year offers a structural opportunity to break through all these barriers. What is most important is “continuity.” Only a virtuous cycle—where technologies are developed, projects are executed, and then connected to subsequent projects—will allow companies to survive and technologies to accumulate.

The closure of D Company, a leading domestic hydropower firm, is a painful lesson in what happens when continuity is broken.

If the government, ordering organizations, and the industry do not align their efforts, this opportunity is also likely to end up as a feast of orders for advanced overseas companies. Only hydropower and pumped storage can fill the void left by the sluggish offshore wind sector. With the “last window” for technological independence now open, a national decision is urgently needed.