Five South Korean power companies to merge into Korea Power next October

South Korea plans to combine its five state-owned power generators into a new company called Korea Power, creating a major electricity producer with about 53 gigawatts of generation capacity.

The companies, Korea South-East Power, Korea Midland Power, Korea Western Power, Korea Southern Power and Korea East-West Power, will become a wholly owned subsidiary of Korea Electric Power. The government plans to launch the company on Oct. 1 next year, 25 years after separating the generation arm of Korea Electric Power into six companies in 2001. Korea Hydro and Nuclear Power will not join the merger.

Korea Power will consist of one headquarters and three or four regional renewable energy divisions. Its headquarters will include divisions for renewable energy, a just transition, safety and technology, and planning and administration. The executive structure will shrink from five presidents, five auditors and 10 standing directors to one president, one auditor and four standing directors.

Of about 2,400 employees currently working at the five companies’ headquarters, around 1,800 will move to the consolidated headquarters. The remaining 600 will work in regional renewable energy divisions, which will develop solar and onshore wind projects while considering local conditions such as site suitability and community acceptance.

The existing regional thermal power plant offices, which employ more than 10,000 people, will retain their current structure to support stable operations and on-site safety. If coal plants close or convert to other energy sources, workers will be reassigned and additional regional renewable energy divisions may be created.

The headquarters location has not been decided. The government says the existing buildings in Jinju, Boryeong, Taean, Busan and Ulsan cannot accommodate the combined headquarters. It will consider the locations of power companies, the regional effects of coal closures, living and working conditions, and a wider policy to relocate public institutions. The government also plans special legislation covering the company’s legal basis, licenses, contracts, employment and tax treatment.