Lots of pain, maybe some gain
The author is an industry 1 team reporter of the JoongAng Ilbo.
Doosan Group is celebrating after earning an unexpected compliment from President Moon Jae-in on July 17. Moon visited the Research Center for Wind Energy Systems in Buan County, North Jeolla and discussed the outcomes of offshore wind energy studies by Doosan Heavy Industries & Construction (DHIC).
He said the technological advancement could be attained with DHIC’s persistent efforts, and he would like to give special thanks. Moon called the 65.5 meter (215 feet) blades of the wind turbines “praise-worthy examples of development.”
Doosan and the energy industry interpret president’s remarks as “appeasing Doosan.” The government’s nuclear phase-out plan is counted as one of the reasons for DHIC’s management crisis — 13 to 15 percent of its total revenue comes from the production, maintenance and repair of nuclear power plant facilities, and the company is not making that much money as new nuclear power plant construct projects are blocked.
As that aggravated the crisis, Doosan borrowed 3.6 trillion won ($3 billion) from the Korea Development Bank and Export-Import Bank of Korea in May. Doosan plans to sell some of its subsidiaries, such as Doosan Solus and Doosan Construction, and assets, including Doosan Tower and Club Mow country club, to pay back the debt. To restructure itself as an ultimately profitable company, Doosan wants to expand the offshore wind energy to 1 trillion-won revenue by 2025. The goal is to increase its renewable energy business to 30 percent of its revenue after adding solar energy.
In short, Doosan can claim that the government is not letting the company make money, and as it struggles, money is loaned, and in exchange, it has to make money by expanding the businesses the government wants. So the company laments that it was considered a villain that builds nuclear plants threatening public safety, and then has been consoled as it is about to collapse.
Success in wind energy is a task Doosan cannot give up. It began to challenge the field in 2005, and Doosan boasts that it is the only Korean company that can cover development, design, construction, and operation of windmills. While Doosan feels bitter about the nuclear phase-out, the president did pick the wind energy complex as the first place to visit after announcing the Korean New Deal.
Uncertainty remains over the consistency of government policy. While the president announced his will to make the country one of the top five offshore wind energy countries in the world by 2030, less than two years remain of Moon’s term. There is room for political distortion in the future. It is not fair if an industry gets boosted by politics, only to fail because of politics.