SAY NO TO COAL, KEPCO!
Don’t invest in risky coal power.
KEPCO is rushing to get board approval to invest in Vung Ang 2, a new power project in Vietnam, and has recently invested in Jawa 9 and 10, the controversial proposed 2,000MW coal power project in Indonesia. The Board needs to take leadership, and not invest in these risky, polluting projects and make smarter, cleaner investments.
The Korean government needs to urge KEPCO not to invest in these polluting projects and commit not to providing any financial support to these projects if KEPCO does invest.
Share Market Forces’ facebook post on an advertisement calling on President Moon not to support overseas coal projects, published in the Washington Post on 22 June 2020.
Take action: send a message to the CEO of KEPCO, calling on the company to stop investing in risky coal power projects like Vung Ang 2 and Jawa 9 and 10.
KEPCO’s potential investment in Vung Ang 2 raises significant risks:
KEPCO is considering CLP’s discards
Hong Kong’s China Light and Power announced its intention to withdraw from Vung Ang 2 in December, leaving Mitsubishi searching for other buyers for the project. Global banks have also signaled their intention not to be involved, including UK’s Standard Chartered Bank, and Singaporean banks DBS and OCBC. What do these investors know that KEPCO doesn’t?
KEPCO might be left holding the project risk if Japan gets out of coal
With CLP out of the picture, Vung Ang 2 is expected to be funded by Japan’s banks. Japan’s environment minister Koizumi has openly discussed his concerns over Vung Ang 2 and the Japanese government is currently seeking to tighten overseas coal power investment policy in June. One of the commercial banks involved, Sumitomo Mitsui Banking Corporation, has also signalled its intention to get out of coal power finance, and will release a new policy at the end of April.
Vung Ang 2 and Jawa 9 and 10 are unnecessary polluters that our climate and health can’t afford.
Vung Ang 2 will use low pollution control standards compared to Korean coal power projects. Due to lax emission standards in Vietnam, Vung Ang 2 is expected to emit massive amount of PM and other air pollutants to the region. Emission standards for plants in Vietnam are often 10-20 times worse than in Korea.
A report, modelling the health impacts of the Jawa 9 and 10, found that Jawa 9 and 10 will cause 4,700 premature deaths over its lifetime.
The solar boom in Vietnam means that more expensive coal power faces stranded asset risk
In Vietnam, solar power is already cheaper than new coal power, including Vung Ang 2.
Most coal power projects in Vietnam have been experiencing significant delay, only worsened by the COVID 19 slowdown. More delays to Vung Ang 2 could be caused where there is community concern about the air pollution from the project.
If built, the electricity produced by Jawa 9 and 10 would be wasted.
Indonesia’s electricity demand may fall by 9.7% due to the Covid 19 slowdown. The Jawa-Bali grid, where proposed Jawa 9 and 10 coal power project is located, could be over-supplied by up to 41.5% in 2020. The oversupply power will be a financial burden that Indonesia cannot afford.
KEPCO’s overseas coal investment has been under significant criticism both inside and outside Korea.
KEPCO is out of touch, and highly exposed to climate risk.
KEPCO is increasing its investment in coal power internationally, while other companies like Sumitomo, Itochu, Marubeni and even Mitsubishi are phasing out coal power. KEPCO’s assessment of overseas coal projects are based on unrealistically optimistic assumptions with little consideration of the rapidly changing energy market.
KEPCO’s shareholders and the Korean public could be left paying for KEPCO’s risky investments.
KEPCO’s shareholders, through the Asian Investor Group on Climate Change, have publicly urged the company not to invest in new overseas coal power, including Vung Ang 2. KEPCO’s risky investments, especially in a time of economic contraction, could lead to the Korean public paying for KEPCO’s missteps, through higher electricity prices or government bailouts.
KEPCO is trying to invest in other problematic coal power projects.
KEPCO claims it “creates clean and safe energy using wind and solar power.” Yet in Southeast Asia, it is also investing in another risky, polluting coal power station – the 1,200MW Sual coal power station in the Philippines.