Power crunch squeezes some industries most

When the government deals with possible power shortages, major companies such as steelmakers Posco and Hyundai Steel suffer the most because they are forced to cut back on their energy usage.

This year, 73 large companies that use a lot of energy are being asked to cut back.

“As the government pushes for more electricity conservation even after we have reduced our power consumption as much as we can, disruption in production seems inevitable,” said a spokesman for a steelmaker.

“We have been coming up with some ideas on how to minimize the impact on production and plant operations so that we can meet our deadlines and delivery dates. However, we estimate that three hours of emergency power savings every day for three months could cut as much as 3 percent of our annual steel production.”

The steel industry decided to slash its daily power consumption by 1 million kilowatts during the period between Aug. 5 and 30.

Posco said it will cut 380,000 kilowatts in its daily power consumption. The steelmaker will halt two plants in August to conduct maintenance works.

LG Chem has decided to shut down its Cheongju and Ochang plants in August to conserve electricity.

During the peak power consumption periods between Aug. 3 and 11, the company will force employees to take vacations for the whole nine days and shut down the plants entirely.

It will not operate power hungry facilities such as freezers and compressors during the peak power consumption hours between 10 a.m. and 11 a.m. and between 2 p.m. and 5 p.m.

At its petrochemical plants in Yeosu, South Jeolla, and Daesan, South Chungcheong, where 24-hour operations are unavoidable, it will adjust its maintenance schedule and facility utilization rate during the peak power usage times, the company said.

In the petrochemical industry, reducing more than 3 percent of the normal power usage is almost impossible, so more drastic measure to cut consumption by more than 10 percent would unavoidably hurt the companies in the industry.

Power failures would significantly harm the semiconductor and display industries, including such players as Samsung Electronics, SK Hynix, Samsung Display and LG Display.

“When the processes of implanting circuits on the semiconductor or injecting liquid crystal in displays are interrupted even for a moment, we must dispose of all our products and start all over from beginning,” said a semiconductor technician.

The private sector is not the only one suffering from power travails.

The share value of Korea Electric Power Corporation (Kepco) has been falling recently on fears of escalating loss caused by the halted nuclear power generators.

Kepco on Friday closed at 25,600 won ($22.9), down 1.16 percent from Thursday’s close.

The sharpest fall that Kepco witnessed recently was on May 29 when the company’s stock value tumbled more than 5 percent after the government announced it was shutting down nuclear generators that were found to have faulty parts a day earlier.

Kepco’s shares are down 18 percent from the beginning of the year.

By Kim Jung-yoon [kjy@joongang.co.kr]