Major power generation companies affiliated with South Korean conglomerates, including Samsung and Posco subsidiaries, plan to file a complaint with the Fair Trade Commission against Korea Electric Power Corp. (KEPCO), citing delays in transmission and distribution network construction that have prevented them from generating and selling electricity.
KEPCO, which led the nuclear phase-out policy under the previous Moon Jae-in administration, has accumulated over 200 trillion won ($150 billion) in debt and reported losses exceeding 40 trillion won ($30 billion) since 2021. As a result, the state-run utility company has been unable to expand its transmission infrastructure as planned. The issue has become increasingly problematic nationwide, with private power producers on the country’s east coast particularly affected. Despite investing billions of dollars in power plants, these companies have been unable to operate them at full capacity, with projected losses this year expected to reach hundreds of millions of dollars.
“Building a power plant requires large-scale investment, often financed through project financing,” said an industry official. “Since revenue from plant operations is used to repay principal and interest, failing to operate the facility inevitably leads to defaults.”
The decision by private power producers—typically in a weaker negotiating position—to take legal action against KEPCO, which controls electricity purchases, highlights the severity of their situation. Industry analysts note that lawsuits against a public corporation responsible for a key national function are rare.
According to an investigation by this newspaper, Gangneung Eco Power and Samcheok Blue Power have completed a year-long legal review with a law firm and plan to file an unfair trade practices complaint with the Fair Trade Commission against KEPCO and the Korea Power Exchange. Gangneung Eco Power is 29% owned by Samsung C&T, while Posco International holds the same stake in Samcheok Blue Power. The complaint alleges that KEPCO failed to build transmission networks as planned while prioritizing the purchase and distribution of electricity generated by its own subsidiary, Korea Hydro & Nuclear Power Co., leaving private coal power producers in financial distress.
With electricity demand surging due to the expansion of artificial intelligence (AI) and other energy-intensive industries, the need for transmission infrastructure expansion has become urgent. However, South Korea is now facing a situation where newly constructed power plants remain idle due to a lack of transmission lines—contrasting with the United States, where coal-fired power plants have ramped up operations following regulatory rollbacks under President Donald Trump.
At the Samcheok Blue Power facility in Gangwon Province, Unit 2 halted operations immediately after entering commercial service on Jan. 1. While the plant had operational priority during the commissioning phase, it lost its ranking once full-scale operations began. Unit 1, which was shut down shortly after commencing commercial service in May last year, resumed operations on Feb. 13 following a nine-month shutdown. However, Unit 2 remains offline, with an overall utilization rate for both units standing at just 7% as of mid-March. The construction of the two 2.1-gigawatt units cost approximately 4.9 trillion won ($3.3 billion), and continued shutdowns could result in losses exceeding 300 billion won ($205 million) this year alone.
At Gangneung Eco Power, coal shipments arrived earlier this year to fuel two coal-fired units, with a 30-day supply stored on-site. However, with the plant’s utilization rate remaining below 20% for a second consecutive year, the company resorted to dousing coal with water to preserve it beyond 60 days. The company has reportedly pleaded with the Korea Power Exchange for additional operating time and even requested that other power producers temporarily prioritize its plant.
With their financial viability at stake, private power producers have turned to the Fair Trade Commission as a last resort, industry analysts say.
