The GS Group has renamed STX Energy, which was acquired late last year, into GS E&R, and is planning to vote for the new name at the extraordinary shareholders’ meeting scheduled for February 25. According to the group, the E of GS E&R stands for three words – electricity, environment, and energy – while the R represents two words of resources and renewable. The new corporate name represents its intention to make a comprehensive energy company.
It is expected that the reorganization of the group’s energy business will take concrete shape once the takeover of STX Energy is completed late this year. The former has GS Energy engaged in natural resources development and GS EPS and GS Power, both being power generation companies. STX Energy has subsidiaries such as STX Solar, STX Yeongyang Wind Power, and STX Electric Power. Some of their business scopes overlap.
In the power generation industry, GS E&R is expected to become the largest private-sector power generator in Korea when the power stations of GS EPS, GS Power, and STX Energy are combined. GS EPS is currently running a 1,503 MW LNG combined-cycle power plant in Dangjin, South Chungcheong Province. GS Power owns plants of the same type in the cities of Anyang and Bucheon with a combined capacity of 904 MW. The total power generation capacity increases to 2,473 MW when the facility expansion in Dangjin is completed by 2017. STX Energy, in the meantime, is building co-generation plants in Gumi and Banwol and a 1,190 MW thermal power station in Donghae, Gangwon Province. Once these stations are running at full capacity in 2017, the combined capacity increases to 4,576 MW, which is greater than that of POSCO Energy at 4,500 MW.
Also anticipated is some synergy effect between the new and renewable energy business of GS Energy, solar cell production of GS Fuel Cell, STX Solar’s manufacturing of photovoltaic cells and modules and STX Yeongyang Wind Power’s wind power generation. Furthermore, the supply of bituminous coal from abroad is expected to increase by making use of STX’s mines located in the United States, Canada, Ireland, and Uzbekistan.