Thursday, August 21st, 2014
SEOUL, KOREA - The financial performances of thermal power generators are in record-low levels. Last summer, they saw their results improve markedly as the heat wave engulfed the nation, with the three nuclear reactors under emergency repairs during the peak season. In contrast, this summer the situation has reversed.
The temperature is about 1-2 degrees Celsius below the average, with all nuclear power plants running at normal level, which results in the disappointing financial results for the power generators. Of these, power plants relying on liquefied natural gas were hit hardest.
According to the Ministry of Trade, Industry, and Energy and the Korea Power Exchange on August 18, the percentage of LNG-fueled turbine capacity use in Korea's five publicly owned thermal power plant operators under Korea Electric Power Corp. for the first 8 days in August was only 27 percent. This is much less than a half of it used to be in the summer months last year when the comparable figure was 67.6 percent. The percentage in July of 45.7 percent was also much lower than that in the same month a year ago at 69.8 percent.
The situation is no different with private power generators. The capacity utilization of major private operators such as SK E&S, GS EPS, and POSCO Energy during the 8-day period in August was 50.3 percent, down from 77.7 percent in August last year. The rate for July was 60.0 percent, down from 71.7 percent a year ago.
Thermal power generation operators use oil, coal, and LNG for their fuels. Of these, LNG-fired generators are run only when electricity supply is at its peak. That's because LNG generators are expensive to operate but take the least time to run. KEPCO and the Korea Power Exchange assign electric power generated at the lowest cost from 4.88 won per kilowatt-hour. The kilowatt-hour price of LNG-based generators is 142.87 won.