"Beyond Equipment to Finance and Planning"... Will the Energy Market Become Korea's New Growth Engine?

An analysis has emerged stating that Korea's energy industry must move beyond manufacturing-centered growth and proceed to a stage of securing business rights in the global energy market. While Korea possesses world-class power grid operation capabilities, it is pointed out that financial procurement power to execute large-scale overseas projects and business planning capabilities to understand local markets need to be supplemented.

World-Class Power Grid Operation Capabilities and Equipment Competitiveness

In a video released on the YouTube channel 'Understanding', Kwon Hyo-jae, CEO of COR Energy Insight, mentioned the competitiveness of Korea's power grid. CEO Kwon explained that although Korea's power grid has a very complex structure globally in terms of complexity and single scale, the blackout duration is at a very short level globally. This operational know-how is analyzed as a crucial competitiveness when entering overseas markets in the future.

Furthermore, he diagnosed that Korea's energy equipment competitiveness is highly maximized in the current situation where China's entry into the global market is limited. However, he emphasized that to generate true profits, capabilities to understand the rules of overseas power markets and plan businesses are essential beyond selling equipment. CEO Kwon cited the lack of a 'training ground' to learn international market changes and rules as a limitation, as the domestic power market is a simple system operated mainly by the government and Korea Electric Power Corporation.

The Japanese General Trading Company Model and the Importance of Global Financial Procurement

The core of large-scale overseas energy projects lies in the financial capability to mobilize massive capital. CEO Kwon mentioned the case where Japan's five major general trading companies have expanded their influence in the energy, resource, and food markets based on internationalized financial power. He explained that Japanese banks have a structure where they procure funds in the global market and supply funds to operators under optimal conditions.

On the other hand, Korea is currently procuring funds centered on the domestic financial market, and when procuring funds in dollars or euros overseas, it mainly relies on overseas banks. CEO Kwon said that to participate in large-scale energy projects reaching the trillion-dollar scale in the future, a 'scale-up' of financial procurement is absolutely necessary. As the project scale grows, a financial procurement ceremony involving dozens of banks is required, and such experience in mobilizing large-scale capital becomes the capability of a company.

Human Resource Development and Overseas Expansion Strategy for Accumulating Undisclosed Know-how

Due to the nature of the energy industry, the contract terms and fee structures of large projects are mostly conducted privately. CEO Kwon explained that such information is 'advanced business know-how' that can only be obtained by directly participating in the field and performing the business. Since the detailed terms of contracts signed with United States companies are not disclosed, he said that directly participating and gaining experience is the only way.

Accordingly, CEO Kwon suggested that overseas projects, such as the ENSIGN gas combined cycle power plant in Texas, United States, should be used as opportunities to build the capabilities of Korean companies. He argued that dispatching talented personnel to overseas Special Purpose Companies (SPC), etc., to work with local developers and gain negotiation and management experience will become a national asset. CEO Kwon mentioned the case where Japan utilized the strong yen situation in the 1980s to purchase overseas assets and subsequently internationalized its organization through local personnel, emphasizing that Korea must also secure a new growth engine in the overseas energy market by combining manufacturing competitiveness with finance and planning capabilities.