KEPCO reportedly announced its withdrawal from U.S. solar power generation business that amounted an investment of nearly 20 billion won over a 4-year period. The company has apparently been left with no choice but to say that verification at the time of project preparation lacked appropriate adequacy, calling on the establishment of a thorough verification system.
KEPCO had reportedly recorded a deficit the previous year owing to higher than expected maintenance costs and lower than anticipated economic effect. Sources further emphasize on the requirement of an appropriate business evaluation in the situation where several domestic companies are recently entering the overseas renewable energy business.
Sources cite that the company KEPCO had initially expected to generate an annual average of nearly 1.2 million dollars in dividend income by increasing the sales of 230 million dollars (around 250 billion won) over a period of 25 years. The company had decided to encourage this overseas initiative at its Board of Directors in July 2016 and started operation in April 2017.
While the actual amount of power generated was only 80-88 per cent of the preparation plan, the actual profit rate amounted to an annual average of 7.25 per cent, lower than expected. According to KEPCO, its Board of Directors proceeded with the liquidation of a 30MW solar power plant in Colorado last month. It is, however, scrutinized that the investment cost of 17 million dollars amounting to around 19 billion won was dropped due to this liquidation decision.
The overseas project’s rate of return as observed in 2017 was 4.7 per cent; in 2018, it was 0.7 per cent while the previous year recorded a deficit of more than 1.1 billion won. The expansion of panels on idle sites in the complex and the installation of an energy storage system are speculated to increase exports of 15 billion won by using domestic equipment.