This file photo taken June 19, 2022, shows electric meters set up in a residential area in Seoul. (Yonhap)
SEOUL, Nov. 1 (Korea Bizwire) — South Korea’s state power utility has reported snowballing deficits despite an increase in sales of electricity.
The Korea Electric Power Corp. (KEPCO)’s sales of electricity for the January to August period of this year stood at 370,854 gigawatt hours (GWh), up 4 percent from a year ago.
However, due to a spike in the “system marginal price” resulting from the sharp increase in global energy prices, its annual deficit is forecast to exceed 30 trillion won (US$21 billion) this year.
Since the electricity rates KEPCO charges are low compared to international energy prices, it is trapped in a situation where the more it sells, the more it loses.
The company’s electricity purchase price stood at 144.9 won per kilowatt hour (KWh) from January to August of this year, up 50 won compared to a year ago, but its selling price grew by a mere 7.9 won to 116.4 won.
Against this backdrop, KEPCO’s financial structure is worsening due to the freezing of the bond market, one of its major fund-raising channels.
The state power firm attempted to issue 400 billion won worth of bonds last month with a maturity of two to three years at annual yield rates of 5.75 percent and 5.9 percent, respectively.
Among them, however, the issuance of bonds worth 120 billion won was suspended.
Ashley Song (ashley@koreabizwire.com)
