In which meeting room is it decided when a coal-fired unit will be shut down and what will take its place? For a long time this decision was scattered across five separate tracks. Now that the discussion of returning the five power generation companies to a single entity has come up again, what needs to be examined is not the shape of the organizational chart. It is whether renewable energy targets are nailed into the merged company's performance indicators.
Reintegration has been a matter of talk for a long time. What has changed significantly is that the labor union, which had strongly opposed it, has come around in favor. The details of the merger plan are still under discussion. Even so, it is clear that the door to discussion has opened.
When companies are divided, renewable energy capacity targets are divided as well. Divided targets get pushed back according to each company's circumstances, and it becomes unclear which company is responsible for the postponed share. An opportunity to address the restructuring of the power generation sector head-on, as is happening now, is unlikely to come again. The success or failure of the merger depends on whether renewable energy targets go into the merged organization's key performance indicators.
The counterarguments are not easy to dismiss. The point is that as an operator grows in size, its inertia grows with it. There is a basis for the concern that if the tension generated by competition among the five disappears, the lifespan of coal facilities could instead be extended.
But it is hard to say that the competition so far has driven up renewable energy investment. The axis of competition was set on the unit cost of generation, and those that produced a lot cheaply received good evaluations. What blocks inertia is indicators rather than competition. When falling short of targets is actually reflected in management evaluation scores and executive performance, plans come out of the documents.
The claim that the transition is finished if the merger falls apart, and the claim that the transition will roll along on its own once the merger goes through, are both far from the facts. If it is settled with a single sheet of carbon neutrality declaration, only the signboard changes. Conversely, if annual capacity targets and a schedule for converting coal facilities go into the main text of the document, the organizational restructuring becomes a force that pushes the transition forward.
The power generation sector is a domain owned by citizens. When the merger plan is released, it is worth opening the table of contents first. Checking just one thing, whether renewable energy targets sit near the front of the main text or are attached at the end of an appendix, is enough to gauge what this restructuring is for.
