Private Coal Operators Resist 2040 Phase-Out
East Coast private power firms claim 17 trillion won in stranded assets due to delayed grid infrastructure and early closure mandates.
Private power companies on South Korea's East Coast are intensifying opposition to the government's plan to phase out coal-fired generation by 2040. These operators, who invested 17 trillion Korean won in new capacity following the 2011 nationwide blackout, argue that their plants face financial ruin due to unresolved transmission bottlenecks and premature retirement schedules.
The core of the dispute lies in the East Coast–Sinhaegyeong HVDC transmission line, which remains unfinished despite a 2019 target. Without this link to the capital region, facilities like the 2,080 MW Gangneung Anin plant operate below 30% capacity, resulting in over 1 trillion won in lost settlement payments for private operators.
Transmission Delays Strangle Plant Output
The Gangneung Anin plant began commercial operations in 2022, yet its revenue capacity is severely constrained by local opposition and permitting delays for the high-voltage direct current line. Son Yong-ho, vice president of Gangneung Eco Power, stated that the four private East Coast firms have suffered significant financial losses because the grid infrastructure necessary to export their power was never delivered on schedule.
This operational stagnation contradicts the original government rationale for opening the sector to private capital. The industry was expanded to ensure rapid execution and source diversification, but the lack of supporting transmission infrastructure has rendered these assets underutilized and financially vulnerable.
Early Closure Cuts Design Lifespan
Under the current policy, the Gangneung Anin plant would close in 2040, only 18 years after its 2022 start date. This leaves 12 years of its 30-year design lifespan unused. Operators argue that such early retirement constitutes a violation of property rights, necessitating substantial compensation for the remaining asset value.
Industry representatives emphasize that large-scale power generation requires massive capital investment with long payback periods. Closing plants before their designated operational end-date without adequate reimbursement threatens the solvency of the private partners involved in these projects.
Experts Demand Legislative Compensation Rules
Academic experts at a recent policy forum advocated for clear legislative frameworks rather than mere enforcement decrees to handle the transition. Yoo Seung-hoon from Seoul National University of Science and Technology suggested the government provide alternatives such as LNG conversion or SMR projects to prevent regional economic collapse.
Park Si-won from Kangwon National University advised that compensation methods and closure targets be codified in law to protect private property rights. Ahn Young-hwan from Sookmyung Women's University noted that stranded assets are a societal consequence, requiring a shared cost-burden model among all stakeholders.
