South Korean state energy sector consolidation

South Korea is pursuing the consolidation of several state-run energy entities to enhance national energy security and facilitate the transition toward renewable energy and carbon neutrality.

In late September 2026, the government launched a preparatory committee to merge five state power generation companies—Korea South-East Power, Korea Southern Power, Korea East-West Power, Korea Western Power, and Korea Central Power—into a single entity called ‘Korea Power Co., Ltd.’ The initiative aims to establish specialized divisions for renewable energy and the phase-out of coal-fired plants, with a target launch date of October 1, 2027.

Parallel efforts to merge the Korea Gas Corporation (KOGAS) and the Korea National Oil Corporation (KNOC) into an ‘Energy Resources Corporation’ have faced significant scrutiny. Critics and lawmakers have raised concerns regarding the combined debt of the two entities, which totals approximately 65 trillion won. Experts warn that without a clear restructuring roadmap, the merger could result in a debt ratio between 600% and 800%, potentially impacting creditworthiness and international investment.