The government has decided to build a gas-fired combined cycle power plant in Encinal, Texas, as the first project of its $200 billion strategic investment in the United States.
Minister of Trade, Industry and Energy Kim Jeong-gwan attended the plenary meeting of the National Assembly's Trade, Industry, Energy, Small and Medium Venture Business Committee on the 22nd and reported to the National Assembly on one project the government has decided to pursue and two projects for which plans have been prepared in relation to investment negotiations with the United States.
Minister Kim said, โToday, I would like to report on one project that the government has decided to pursue through the Project Management Committee chaired by the Minister of Trade, Industry and Energy and the Steering Committee chaired by the Minister of Finance and Economy.โ
He added, โAlthough we have not yet decided on a specific decision to pursue the project, we would like to report on the implementation plan for two projects that reflect the interests of both countries.โ
According to an official from the Ministry of Commerce, Industry and Energy, the first investment project in the United States mentioned by Minister Kim was confirmed to be a project to build a gas combined cycle power plant in the Encinal region of Texas.
Recently, as a large number of cutting-edge semiconductor factories and artificial intelligence (AI) data centers have been built in Texas, demand for electricity is rapidly increasing. The Encinal project is designed to respond to this, and the total installed capacity is approximately 6.3GW (gigawatt).
First, it was reported that a 1.4GW gas turbine power plant would be built first to check actual demand and economic feasibility, and then a 4.9GW combined cycle power plant with high power generation efficiency would be sequentially expanded.
The total project cost is 22.3 billion dollars, and the government is said to have reported to the National Assembly the results of the business feasibility study that it can sufficiently recover the principal and interest by earning 43.29 billion to 45.43 billion dollars over 20 years.
Unlike Project No. 1, the two projects classified as future discussions were identified as the construction of eight large nuclear power plants in the United States and the Alaska Liquefied Natural Gas (LNG) development project.
These three major energy projects, including the Encinal gas-fired combined cycle power plant construction project, have been constantly pointed out as being in violation of the principle of 'commercial rationality' that the government has been advocating due to the uncertain return on investment and business risks.
In particular, the government pursued a plan to secure approximately 20% of the shares of Westinghouse, an American nuclear power plant company, in connection with the construction project of eight new nuclear power plants in the United States, but negotiations suffered as the United States showed reluctance.
Minister Kim said in a report to the National Assembly that day, "We are negotiating with the United States with the goal of securing a 5 to 10 percent stake in Westinghouse," an official from the Commerce, Industry and Energy Agency reported.
In addition, the government is pursuing a plan to construct 6 of the 8 new nuclear power plants to be built in the United States with the AP1000, a Westinghouse model, and 2 with the APR1400 developed by Korea, but it is reported that there is still no agreement.
Despite this controversy over commercial rationality, the government's decision on the first project and reporting of plans for follow-up projects is interpreted as a decision that considered national interests from a comprehensive perspective, including the entry of Korean companies into the U.S. market, beyond simple business feasibility.
Minister Kim said, "The government has been in intense consultation with the United States to promote commercially rational projects," and added, "It was necessary to take a balanced approach from the perspective of national interest so that investment in the United States goes beyond simple investment and recovery of funds and becomes an opportunity to expand Korean companies' entry into the U.S. market and further establish a foundation for entry into the global market."
Minister Kim also made clear the principle that the actual scale of investment should not exceed $200 billion, which is the limit for investment funds in the United States. Minister Kim is said to have expressed his intention not to invest if it exceeds $200 billion.
The report on this day was conducted privately as it included sensitive information such as the terms of the agreement between Korea and the United States and detailed investment conditions for the project.
An industry committee member met with a reporter from Yonhap News after listening to a private report and said, "It appears that the date for signing the MOU has not been set yet," and added, "With regard to investment in nuclear power plants in the U.S., Korean-type nuclear power plants must of course be included."
