KEPCO gives up U.S. solar company amid waning international status
South Korea’s state utility firm Korea Electric Power Corp. (KEPCO) will liquidate its money-losing U.S. solar power company as its international status comes under challenge amid waning competitiveness from government-led phase-out of traditional fossil and nuclear fuel.
According to KEPCO documents obtained by Representative Yang Geum-hee of the United Future Party on Tuesday, the company’s board last month decided to give up its 30-megawatt solar power plant in Colorado, U.S.
The state utility firm invested $17 million in the U.S. solar energy plant in July 2016 and began operation in April 2017 on expectations that the business would generate $230 million in revenue over 25 years from the sale of electricity from the plant to provide an annual average dividend income of $1.2 million.
Output turned out to be 80 to 88 percent of its original estimate. Its expected profit rate was also lower than 7.25 percent on an annual average due to high general management cost and solar power panel maintenance cost.
Its return rate was 4.7 percent in 2017 and fell to 0.7 percent in the following year. In 2019, KEPCO suffered 1.1 billion won in losses from the project.
KEPCO plans to sell the plant’s assets including the plant land in the second half of next year and completely liquidate the corporation in the second quarter of 2022.
This is not the only overseas energy setbacks for KEPCO.
Overseas thermal and nuclear power plants have come under challenge due to phase-out under process at home.
KEPCO is now a part of a team that is building a 1,200 megawatt coal-fired power plant in Ha Tinh Province in Vietnam. The project, dubbed Vung Ang 2, is worth 2.5 trillion won, and KEPCO owns a 220 billion won stake in the project. It cannot proceed with the project under a new bill pending at the National Assembly that restricts the state utility’s investment in fossil fuel.
KEPCO plans to hold a board meeting this week to decide whether or not to push its investment in the Vung Ang 2 project.
Its campaign to export Korea’s reactor technology also has been dampened by the ongoing phase-out at home.
The Czech Republic is currently planning to build one 1,000 to 1,200 megawatt reactor in Dukovany that is projected to cost at least 8 trillion won. KEPCO is pitted against China, France, Japan, and Russia.
An unnamed official from the nuclear industry notes less chance to win overseas nuclear projects while home industry is in exit process.
Source : pulsenews
