Despite Pressure for Withdrawal from Ruling Party
Korea Electric Power Corp. (KEPCO) has decided to push forward with a thermal power plant project worth 4 trillion won in Indonesia as planned.
The decision came following stiff opposition to the project from the political circles, including the ruling party, and Korean environmental and civic groups. But KEPCO judged that it cannot put off the project any longer as it passed a preliminary feasibility study.
KEPCO held a board meeting on June 26 to discuss such matters as the Indonesian thermal power plant project, ways to ensure the safety of energy storage systems (ESSs), expanded connection of power distribution systems, and mid- to long-term financial plans, according to Rep. Yoon Han-hong of the main opposition Future United Party. A plan to reform the electricity billing system was not on the agenda but was discussed at the meeting.
The Jawa Project to be promoted by KEPCO in Indonesia is a US$3.2 billion project designed to build two coal-fired power plants, Jawa Nos. 9 and 10, near Jakarta. KEPCO will establish a joint venture with Indonesian Power to carry out the project. KEPCO plans to make an equity investment of US$51 million and provide a loan guarantee worth US$250 million. Doosan Heavy Industries & Construction has won a 1.6 trillion won construction order.
KEPCO pondered until June, the day before the board meeting, whether to include the Jawa project in the agenda. It has been under pressure from the Korean government and the ruling Democratic Party to withdraw from the project as they have recently announced the Green New Deal policy aimed at expanding renewable energy generation. Civic groups also demanded KEPCO’s withdrawal, saying that the Korea Development Institute (KDI)'s preliminary feasibility study showed that it would suffer a loss of about US$8.8 million.
KEPCO, however, has been seeking to enter the Indonesian private power generation market since 2002 as it has big growth potential. The Indonesian government will place orders for private power generation projects amounting to more than 30 GW over the next 10 years.