Korea's 5 power firms seek limits on coal plant starts; KPX rejects
Korea's five major power generation companies formally requested the Korea Power Exchange (KPX) to limit annual start-stop cycles for 500MW coal power plants to 60 times, and individual units to once a week or five times a month; however, KPX rejected this, citing grid operational stability concerns.
Our take
What is the financial and operational impact of increased coal plant cycling in Korea?
The increasing integration of renewable energy in Korea is shifting the operational burden and associated costs of grid flexibility onto traditional coal power plants, which are now incurring significant expenses and accelerated wear from frequent start-stop cycles, a cost currently borne by the operators without clear compensation mechanisms.
As renewable energy generation expands, coal plants are increasingly dispatched as 'flexible power sources' to manage grid fluctuations, leading to a 2.5-fold increase in daily start-stop events in two years. This operational change incurs substantial costs for fuel (e.g., 487 million KRW for a cold start) and accelerates equipment degradation, which the power generation companies are currently absorbing. The Korea Power Exchange's rejection of operational limits, based on the Electric Business Act Article 27-2 for grid reliability, highlights the tension between maintaining grid stability and the economic viability and physical limits of existing thermal assets.
What the source says
- The five power generation companies requested the Korea Power Exchange to limit annual start-stop cycles for 500MW coal plants to 60 times, and individual units to a maximum of once a week or five times a month.
- The Korea Power Exchange rejected the request for start-stop limits, stating it was unacceptable for grid operations.
- The role of coal power generation has shifted from base-load to flexible power sources due to the increase in renewable energy.
- An official from a power generation company stated that equipment, previously stopped once or twice a year, now undergoes daily start-stops, causing stress to metal components.
- The five power generation companies jointly commissioned a study to determine appropriate management standards and cost reflection methods for start-stops and maintenance.
- The government's autumn power supply measures (September 19 to November 15) include minimizing coal complex operations and classifying coal and LNG as flexible power sources for priority curtailment during output control.
For investors — Investors and operators of coal power plants in Korea face escalating operational costs and reduced asset lifespan due to increased cycling, necessitating the development of new market mechanisms or compensation schemes for providing grid flexibility.
Watch: Monitoring the outcome of the joint study commissioned by the five power generation companies on appropriate management standards and cost reflection for coal plant start-stops, and any subsequent policy discussions between power companies, KPX, and the government.
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