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Board of Directors (Care)

Risk Deliberation Committee
(Consisted of inside&outside experts)

Operation Risk Committee
- Conflict management
- Contract
- Security
- Sexual harassment & Sexual violence
- Safety management
Business Risk Committee
- Domestic business
- Foreign business
- Government request business
Financial Risk Committee
- Invest deliberation
- Budget deliberation
- Exchange risk management
- Public announcement

Independent Audit
(Accounting Firm : EY)

- Inspect Financial Statement
- Internal accounting control system

Audit Committee
(Chair person : Noh, Geum-sun)

Internal Audit
- General Inspection
- Routine Inspection
- Specific Inspection

※ CRO : Lee heyn-Bin, Senior Executive Vice President
※ CISO : Choi Gab-Cheon, Head of Information Security Team

Emerging Risks (Medium & Long Term)

(Risk 1) Government’s Coal Power Reduction Policy for Carbon Neutrality(+)

  • ▪ Description of the Risk

    According to the Ninth Basic Plan announced in December 2020, the total coal-fired power plant capacity in 2030 will decrease to 32.6 gigawatts from 35.8 gigawatts in 2020, and its percentage of total power generation capacity will decrease to 18.9% from 28.1% in 2020. In addition, the Government will introduce a system that will limit the annual power generation of coal-fired power plants in line with its greenhouse gas reduction target.
  • ▪ Potential Impact

    Reduction of coal power generation and increase in LNG power generation and new renewable power generation may increase the volatility of electricity purchase cost and affect the sales and profits of subsidiaries.
  • ▪ Mitigation

    KEPCO promotes power generation portfolio conversion by converting coal-fired power generators to LNG generators and continuously expands new renewable power generation in the mid-to-long-term
    • Abolition of 30 coal generators and conversion to LNG by 2030
    • Expansion of renewable power sources such as solar power and wind power
    • Development of non-carbon new sources such as hydrogen

(Risk 2) Increase in environmental-related costs, such as the cost of purchasing carbon credits(+)

  • ▪ Description of the Risk

    In accordance with the Act on Allocation and Trading of Greenhouse Gas Emission Allowances, during the third phase (2021 to 2025), the Government expanded the scale of the system with aggressive greenhouse gas emission reduction targets and allocating 10% of the greenhouse gas emission allowances through an auction.
    Renewable Portfolio Standard. Under this program, each of our generation subsidiaries is required to generate a specified percentage of total electricity to be generated by such generation subsidiary in a given year in the form of renewable energy or, in case of a shortfall, purchase a corresponding amount of a Renewable Energy Certificate (a form of renewable energy credit) from other generation
    companies whose renewable energy generation surpass such percentage. From October 2021, an amendment to the Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy will become effective to raise the upper limited of the target percentage even higher to 25% from the previous threshold of 10%.
  • ▪ Potential Impact

    The cost of purchasing carbon credits and new renewable supply certificates increases, which may affect the financials of KEPCO and its subsidiaries and act as a factor in increasing the climate and environmental costs of electricity rates
  • ▪ Mitigation

    As of January 1, 2021, we implemented a new cost pass-through tariff system to reinforce the correlation between the costs we incur and the tariff we charge to our customers and to enhance transparency by separately billing fuel costs and climate/environment related costs However, our ability to pass on fuel and other cost increases to our customers may be limited due to the regulation of the Government on the rates we charge for the electricity we sell to our customers. In addition to the built-in caps described in the preceding paragraph, the new tariff system gives the discretion to the Government not to wholly or partially adjust the quarterly Fuel Cost Adjusted Charge in case of extenuating circumstances.