August 2, 2020 Read More →

Doosan plans South Korea’s first locally built large gas turbine for 2023

Power Magazine:

Doosan Heavy Industries & Construction (DHIC) this summer made major strides to establish itself at the core of South Korea’s strategy to become only the fifth country to own an independent gas turbine model.

Following announcements of a deal in December 2019, the Changwon, South Gyeongsang-based company on June 22 cemented dual contracts valued at a total $300 million with Korea Western Power Co. (KOWEPO) for the construction of the 500-MW Gimpo Combined Heat and Power (CHP) plant, which is located in Gimpo’s Yangchon-eup in the Gyeonggi Province. That project, which is scheduled to go online in the first half of 2023, will use liquefied natural gas (LNG) to produce district heat and power to nearby regions. But it is also notable because it will demonstrate South Korea’s first locally manufactured large gas turbine.

This April, the company’s prospects were so debilitated by the coronavirus pandemic that state-run creditors—the Export-Import Bank of Korea and the Korea Development Bank—stepped in to stave off DHIC’s “liquidity crisis” by extending a 1 trillion won ($817 million) credit line “as part of a relief package to cushion [DHIC],” as The Korea Herald reported.

The “bailout” came with the realization that if Doosan Heavy Industries failed, nearly a quarter of the electricity on Korea’s grid would be up in the air, with no other domestic companies qualified to step into Doosan Heavy’s role, observed another newspaper, Korea JoongAng Daily. But creditors also underscored the risks. “The two state-run creditors essentially want the company to restructure and separate profit-making affiliates from under its arms. They remain concerned that the financial risks from Doosan Heavy Industries’ plant-building business could extend even to its profitable affiliates,” the newspaper reported.

Analysts, too, have urged caution. “The company is struggling with a structurally unprofitable business model and is not keeping pace with the investment required to develop distinctive clean technology solutions that fast-growing Asian power markets will reward,” said financial analyst Ghee Peh, who co-authored a report scrutinizing DHIC’s finances for the Institute for Energy Economics and Financial Analysis in September 2019. 

[Sonal Patel]

More: South Korea Forays into Gas Turbine Manufacturing

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