Korea considers opening up coal generation to private sector

South Korea is considering allowing non-state companies to generate coal-fired power for the first time in three decades, as it adds capacity to prevent blackouts that cost the economy US$11 billion.

“It will be good to allow a certain number of private coal power generators,” Nam Ho Ki, the chairman of Korea Power Exchange, the government-run company that oversees the country’s power supply and is helping to decide on the new policy, told Bloomberg. “We are positively considering that option.”

Korea Power is aiming to decide on more than 30 applications from state and private companies to build new plants by the end of the year, as part of its review with the government of the nation’s energy mix, Nam said.

South Korea, Asia’s fourth-largest economy, should retain its equal weighting between coal, natural gas and nuclear, said Nam, who is 62 year old. And, while he can’t see the country dropping nuclear power, neither does he foresee non-government controlled companies entering the business, after a unit of steelmaker Posco Group made and then withdrew an application to build a nuclear plant.

Nam, who began his career in 1968 at Korea Electric Power Corp., or Kepco, became chairman of Korea Power Exchange in November 2011, after his predecessor resigned following nationwide blackouts in September, the first since 2001.

Among private applicants for coal power plants are units of Posco Group, Tongyang Group, SK Group, Dongbu Group, and STX Group, who benefit from their control of the supply chain, he said. It costs 3 trillion won to 3.2 trillion won to build a 2,000-megawatt coal generator.