Strengthening Green Energy Biz
South Korea’s largest utility provider Korea Energy Power Corp (KEPCO) is reportedly in talks to acquire a California-based solar power plant in the United States, according to Reuters on August 27 and KEPCO on September 1. After a recent meeting with the company that owns the power plant in California, the KEPCO is currently working with the Ministry of Trade, Industry and Energy on the details of stake purchases. The company will make a final decision on the stake purchase at its board meeting to be held next month.
The capacity of the plant in California is expected to be seven times bigger than the Colorado-based solar power plant that KEPCO previously acquired.
The KEPCO bought the solar power plant in Alamosa, Colorado, for US$30 million (33.6 billion won) in June last year. The plant has a generation capacity of 30 megawatts and supplies power to about 10,000 homes.
The two companies are still in discussions on the actual price of the plant but it is the not subject of preliminary feasibility survey. The government has revised the “The Law on Management of Public Bodies” in March 2016 in order to strengthen the autonomy of public institutions and made a preliminary feasibility survey mandatory for projects that take more than 100 billion won (US$88.73 million) of working expenses and more than 50 billion won (US$44.37 million) of the combined amount of state funding and public institution funding.
Earlier, the KEPCO sought to acquire a wind power farm with a capacity of 100 megawatts in the West Coast in the U.S. However, the deal fell through as it failed to pass the preliminary feasibility survey of the Korea Development Institute (KDI).
California is the most highly developed solar power region in the U.S. and it has covered 50 percent of the total power demand through photovoltaic power generation.
Until now, the KEPCO has been continuously pushing into the U.S. market which is the world’s largest power market. Last year, KEPCO President Cho Hwan-ik personally visited the U.S. and signed a contract to take over the stake in the solar power plant in Colorado. The KEPCO agreed to sell electrical power generated at the plant for 25 years.
In June this year, the KEPCO bagged an order from Guam Power Authority (GPA) to build solar power farms linked to an energy storage system (ESS) through an international competitive bidding by forming a consortium with LG CNS Co., an information solution unit of South Korean conglomerate LG Group. The consortium will invest US$200 million (230 billion won) to build and manage the 60 megawatt solar power farm backed by the 42 megawatt-hour ESS for 25 years once the construction of the facilities is completed.