The Korea Chamber of Commerce and Industry (KCCI) announced on the 3rd that 4 out of 10 manufacturing companies are considering trying new methods of power procurement, such as self-generation or using the wholesale electricity market, due to the burden of industrial electricity rates.
In a survey conducted by KCCI involving 300 manufacturing companies, when asked whether they would consider establishing their own power plants or purchasing electricity from the wholesale market as a relatively cheaper option due to increased industrial electricity rates, 11.7% responded “yes.” Additionally, 27.7% stated they would consider doing so if the rates increased further.
KCCI explained that these responses indicate that it has become more cost-effective to generate their own power or purchase from the wholesale market due to the rise in industrial electricity rates. They noted that since 2000 until December last year, residential electricity rates have increased by 42%, whereas industrial rates have surged by 227%. Historically, industrial rates were lower than residential ones, sparking debates about corporate benefits. Since 2000, the rate of increase in industrial electricity charges has accelerated, making them more expensive than residential rates from 2023 onwards. Amidst this, Korea Electric Power Corporation (KEPCO) turned a profit for the first time in four years, recording an operating profit of 8.349 trillion won last year due to the increase in electricity rates.