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KEPCO Suffers Huge Losses As a Result of Nuclear-free Energy Policy
70% of Koreans Against Nuclear Phase-Out Policy
KEPCO Suffers Huge Losses As a Result of Nuclear-free Energy Policy
  • By Michael Herh
  • August 17, 2018, 11:07
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KEPCO posted a deficit for the third consecutive quarter for the first time in six years since 2011.
KEPCO posted an operating loss in the second quarter of 2018, extending the streak of quarterly losses to three, a disgrace it suffers for the first time since 2011.

Korea Electric Power Corp. posted 680 billion won (US$610 million) in operating loss in the second quarter of this year, continuing its deficit for three consecutive quarters. It is the first time since 2011 that the state-run power utility chalked up a loss for three quarters in a row. In 2011, the main cause of the deficit was high oil prices that shot up to US$120 per barrel. The current poor performance is blamed on a combination of factors, including lower utilization rates at nuclear power plants, an increase in the proportion of liquefied natural gas (LNG) generation that costs more than generation by nuclear power plants, and an increase in fuel prices.

On August 13, Park Hyung-duk, vice president of planning at KEPCO, announced a provisional earnings estimate for the first half of 2018 in Sejong City. KEPCO posted 687.1 billion won (US$610 million) in operating loss in the second quarter of this year. Its operating loss in the first half of this year amounted to 814.7 billion won (US$733million) including 127.6 billion won (US$115 million) in the first quarter of the year. KEPCO posted 2.3 trillion won (US$2.1 billion) in operating profit in the first half of last year. The company recorded an operating loss of 129.4 billion won (US$116 million) in the fourth quarter of last year as well.

In the energy industry, experts say that the Moon Jae-in administration’s nuclear phase-out policy caused KEPCO’s business performance to deteriorate. They are concerned that KEPCO's large deficit will eventually lead to an increase in electricity rates. The nuclear power plant utilization rate, which stood at 79.9% in 2016, dropped to 54.9% in the first quarter and 62.7% in the second quarter this year.

Meanwhile, a survey found that seven out of 10 people were in favor of nuclear power generation. On August 16, the Korea Nuclear Society announced the results of a survey on the awareness of 2018 nuclear power generation in a joint press conference with the Professor Council for the Rationalization of Energy Policies and the Science and Technology Forum. According to the Korea Nuclear Society, 71.6% of the respondents said they favored nuclear power generation. The naysayers accounted for only 26%. By political preferences, both conservative and progressive people preferred the continuance of nuclear power generation to a nuclear phase-out.

Asked about the proportion of nuclear power generation in future electricity production, 37.7% of the respondents said that Korea should expand its proportion and 31.6% said that Korea should maintain it. This means that seven in ten people wanted Korea’s expansion or maintenance of nuclear power generation.