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KEPCO records deficit of 14 trillion won in first half

Posted August. 13, 2022 07:27,   

Updated August. 13, 2022 07:27


Korea Electric Power Corporation (KEPCO) recorded operating losses exceeding 14 trillion won for the first half of the year. It is 2.5 times larger than those of the previous year, which witnessed then-record-high losses. Some worryingly predict that the magnitude of deficit may reach 30 trillion won annually.

KEPCO announced on Friday its operating losses of 14.3033 trillion won for the first half of the year. The second quarter alone posted a deficit of 6.5163 trillion won, which surpassed the annual losses of 5.8601 trillion won in 2021. The surge in losses is caused by a sharp increase in prices of both fuel such as LNG and coal and electricity that KEPCO purchases from power companies.

The corporation struggling with record losses in the second quarter after its 7 trillion won-hovering losses in the previous quarter requested for yet another price increase for electricity. The government plans to minimize the rise in electricity costs considering the current inflation breaching 6 percent. Some are, however, arguing that its operation issues causing astronomical deficits should immediately be addressed by increasing electricity prices to a realistic level that can bear its production costs.

KEPCO may likely post another trillion-range loss in the latter half considering hike in electricity demand in the summer and skyrocketing energy prices. Professor Yoo Seung-hun teaching energy policies at Seoul National University of Science and Technology said the price of LNG will likely go up further as energy demands for heating rise in the winter and the operating losses may get bigger than the first half.

Hee-Chang Park ramblas@donga.com