KEPCO Runs up Huge Quarterly Loss

The government's nuclear phase-out has triggered a surge in expensive liquefied natural gas-fueled power generation, causing power monopoly KEPCO its worst losses in six years

KEPCO's debt soared to a record W114.6 trillion, the power provider said in a public notice Monday (US$1=W1,134).

KEPCO posted a W687.1 billion loss in the second quarter, the third straight quarter of losses. First-half operating losses therefore swelled to W814.7 billion, the second worst on record since 2012.

The main reason was soaring international oil prices which hit US$100 a barrel. KEPCO also pointed to a drop in the number of nuclear reactors in operation due to maintenance, halted operations of aging coal-fired power plants and rising LNG power generation.

But experts said the main culprit was the drastic decline in nuclear plant operation to just 58.5 percent in the first half, down 15.9 percentage points from the same period of 2017. Nuclear power costs just 53 percent of LNG power.

But KEPCO said the operation rate of nuclear reactors will rise to 76 percent during the second half of this year, suggesting that earnings could improve.

On Ki-woon at Soongsil University said, "KEPCO knows very well that the only way to recover from the losses is to expand nuclear power generation."

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