South Korea’s private liquefied natural gas (LNG)-fueled power plant operators are troubled by deteriorating balance sheets due to a fall in electric charges and their uncompetitive production costs.

According to the country’s power development industry on Monday, five among six privately owned LNG power plant operators - Posco Energy Co., Dongducheon Dream Power Co., Pocheon Power Co., S-Power Co., SK E&S Co., GS EPS Co. - saw their profitability wither.

Posco Energy posted 135.4 billion won ($121.5 million) in net loss for full-year 2016, turning to the red from surplus of 18.8 billion won from a year earlier despite sales of 1.7 trillion won. Its operating profit was down 41.5 percent on year to 66.3 billion won in end-2016.

Dongducheon Dream Power also registered 27.9 billion won in net loss last year, extending losses from the previous year when its net loss reached 10.3 billion won. Its operating profit tumbled 74 percent in 2016 from a year ago-period.

Pochen Power also reported net loss for the second year in a row with net loss reaching 44.4 billion won on operating loss. SK E&S that managed to avoid net loss also saw its operating profit plummet by 91.4 percent on year to 12.1 billion won.

GS EPS remained sole gainer among the nation’s major private LNG-fueled power plant operators with its full-year 2016 operating profit standing at 70.8 billion won, up 45.4 percent from a year earlier.

Their ordeal is largely to blame on sluggish demand which sent many LNG-powered generators idle.

As fuel costs to run LNG power plants are generally more expensive than those for coal and nuclear power-backed peers, their operating rate is often lower than that of coal and nuclear power plants. The operating rate of local LNG-based power plants slipped to 38.8 percent last year from 41.1 percent in 2015.

Also low oil prices have resulted in cheaper system marginal prices, or wholesale electric charges, at which the power generators sell electricity to state-run Korea Electric Power Corp. (KEPCO).

By Jung Wook

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