KEPCO Wins First Overseas Solar Power Plant Project

Korea Electric Power Corp. (KEPCO) won a solar power plant project with a total capacity of 39MW in Hokkaido, Japan. It is the first time for KEPCO to obtain the order for solar power plant projects abroad.

According to industry sources on Apr. 5, KEPCO SPC, whose 80 percent of shares are owned by KEPCO, will sign a formal contract with Japan’s Hokkaido Electric Power Co. later this month for solar power plant projects. Under the deal, KEPCO will be in charge of operation and maintenance of the plant in the next 20 years and LSIS Co., Korean supplier of Electric equipment, will be responsible for engineering, procurement and construction (EPC) services. Through the power purchase agreement (PPA) with Hokkaido Electric Power, the company will be able to purchase electricity, which is generated in Hokkaido Electric Power’s plants, at 40 yen (US$0.36 or 420 won) per kilowatt-hour for 20 years, securing stable power sale profits.

In particular, domestic component firms, which produce transformers and circuit breakers, will supply the products in the project, while Samsung SDI Co. will provide energy storage system batteries to ease the output. KEPCO plans to start the construction of the plant later this month when the contract is finalized and complete it in the fourth quarter next year. Korea Development Bank (KDB), which is participated in the project as a lender, will provide 80 percent of total project expenses worth 11.2 billion yen (US$101.48 million or 117.71 billion won) with project financing.

With the latest deal, KEPCO will gradually move its new renewable business focus from wind power to solar power. The company invested in a 40 percent share of a wind power plant in Inner Mongolia in the north of China in the late 2000s, and won the operation rights of a wind power farm in Jordan at the end of last year. However, wind power plant projects have smaller ripple effects from receiving orders than solar power plant projects, which allows many domestic component producers, including panel, model and inverter, to join the projects.