Plans to merge South Korea's five state-owned power utilities into a single entity were confirmed by the government today.
The government is targeting July 2027 for the launch of the merged entity, sources previously told Argus. The utilities, which have operated separately since they were split from state-owned Kepco in 2001, are preparing for the consolidation through a joint task force.
The consolidation is designed to bring the utilities' workforce and assets together to strengthen their ability to support the country's transition towards renewable energy and manage a just transition away from coal.
The merged entity will provisionally be called Korea Power Generation. It will have a dedicated division to oversee the just transition from coal-fired generation, alongside a renewable energy division.
The government expects the combined structure to increase investment capacity, while joint procurement could improve profitability.
But market participants have previously questioned the potential cost savings from joint coal procurement, as buying larger volumes does not necessarily translate into lower prices in the South Korean coal market. They instead see greater benefits in coal supply management.
Some expected the merger to bring greater transparency to the South Korean coal market, while others questioned whether reduced competition among buyers would benefit the market.
The five utilities currently procure coal individually, with price playing a key role in buying decisions. Following the merger, procurement could put a greater emphasis on supply security and fuel quality, market participants said.
Further discussions on the merger are due to take place on Friday, sources told Argus.
