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The Korea District Heating Corporation (KDHC) is the largest district heating company in Korea.It was
established in 1985 as a public corporation.As of 2008,KDHC has the main office and fifteen branch
offices nationwide with a total of 1,091 employees and supplies heating and cooling to 1,028,574
households,1,853 customers of commercial and public buildings(the total heat sales of 12,360 Gwh)
with a 1,433 km distribution network.

SEOUL M METROPOLITAN TRANSMISSION NETWORK CONNECTING SIXTEEN DISTRICT HEATING

PLANTS

Figure shows district heating service areas and networks in the Seoul Metropolitan region operated
by KDHC and other private companies.KDHC has constructed Seoul Metropolitan transmission
network linking sixteen district heating plants from PAJU to HWASUNG for the purpose of increasing
the energy-use efficiency of each plant and a continuous supply to the customer.It has a length of
105 km with a pipe dimension of 600 mm ʹ 850 mm and as of 2008,KDHC supplies 10,604 GWh of
the district heating and cooling to 832,000 households, 1,661 customers of commercial and public
buildings with the aid of the Seoul Metropolitan transmission network.

Beginning in 1990, the governmet started to build new towns around Seoul such as
BUNDANG,GOYANG and SUWON to decrease a high populatin density of Seoul.At that time , a few
CHPs(combined heat and power plants) were constructed as heat sources for new towns and so
KDHC started to expand the district heating supplying area.In the maintime,because of the
government policy to expand the Seoul area,GANGNAM and SUSEO area were also developed as
housing sites and KDHC started to supply district heating to those areas with the heat only
boiler(HOB) and the incinerator.
Low heat loss resulting from supplying heat to big apartments and builldings

Korean district heating system is normally applied to high population density areas where
apartments and buildings have more than 20 floors.This gives KDHC a great opportunity to lowerthe
investment and operating cost of district heating facilities and reduce heat loss.However ,supplying
heat to high population density areas requires the installation of large dimentional pipes,which
hassome disadvantages for KDHC,because it is difficult to excavate large areas in an existing city.As of
2008 ,40% out of KDHC`s total network is larger than 300 mm.

Since late 2000,KDHC has started to build and own big CHPs.The construction of HWASUNG CHP was
completed and the building of PAJU,PANGYO,SAMSUNG and GWANGGYO CHPs are expected to be
completed in the near future.

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District cooling is supplied to commercial and public buildings.The basic concept of district cooling,as
it is shown in figure,is using warm water from heat sources,heat suplying network,absortion
refrigerators and cooling towers on the customer side.

Figure.The concept diagram of district cooling using warm water in Korea

As of 2008,KDHC supplies district cooling to 278 customers of commercial and public

buildings.NowadaysKDHC strives to expand the district cooling business and expects to supply district
cooling to residential apartments in the near future.

FUTURE PROSPECTS

Since district heating and cooling was introduced to Korea,it has contributed to increasing energy-use
efficiency,improving national life andenvironment.In recent days,as keeping a clean environment
becomes more important issue,district heating and cooling becomes the most popular and its
business is expanding.
With the rapid growth of district heating and cooling business,KDHC pays attention to following items
in the network aspect.

jY First,the developt of new methods to produce more rapid pipe contruction while sustaining
good quality.
jY Second,increasing installation capacity to improve energy efficiency and the development of
new material which enables KDHC to deliver more heat capacity than one of the water
currently used indistrict heating system.
jY Third, accurately measuring the remaining network life span and establishing a pipe repair
and replacement plan.

KDHC is committed to focus theireffortsin the future to resolve these issues and to co-operate with
European and U.S companies concerning above metters. For example; The Boston-based
International District Energy Association (IDEA) and the Korea District Heating Association (KDHA)
have entered into a formal cooperation agreement, pledging to collaborate on research activities and
the exchange of technological information and business practices.

According to the IDEA's Thornton, Korea is a strategic market sector for the exchange and promotion
of U.S. technologies, products and services in the global expansion of district cooling, district heating
and combined heat and power. In particular, Korean district energy companies are interested in
district cooling system development and the integration of renewable and fuel-flexible technologies
like wood waste, biomass and landfill gas for district energy facilities. U.S. systems can learn from
Korean experience in serving large blocks of residential buildings and integrating multiple heat
sources into larger district networks.

KDHA President Kim also serves as president and chief executive officer of Korea District Heating
Corp. (KDHC), a large utility company that owns, operates and manages 14 district heating systems in
greater Seoul, South Korea. In 2005 KDHC had annual revenues of 487.5 billion won (more than $501
million). The company is seeking to expand its business with the goal of providing district cooling and
heating services to 1.5 million households nationwide by 2015 and generating annual sales of 1.5
trillion won (more than $1.5 billion).

In 2002, the energy-saving effect of KDHC's district energy system was a 53 percent reduction in fuel
consumption in its service area - approximately 663,000 tons carbon dioxide - compared with
conventional heating systems, resulting in $342 million of avoided fuel costs. Additional
environmental benefits of KDHC's system included a 23 percent reduction of greenhouse gas
emissions compared with conventional heating systems - approximately 1 million tons of sulfur
oxide, nitrogen oxide and dust, plus 49 percent less carbon dioxide.

Korea is the only heat-meter market of any size of in Asia;shipments were estimated to be 68k units
in 2007 , all hbrid mechanical types.No static meters are forecast to be on the market by 2012,as all
heat meters in South Korea are supplied by local meter manufacturers with all heat meters
implanted at the lowest possible cost.

In South Korea the provision of ͚heat͛ through district heating has been metered with hot-water
meters,not heat meters.with 25% of all heatingin South Korea provided through district heating.
The water meter market is forecat to grow at a 3.4% CAGR annually to 2012.Domestic metering is
done with velocity types.



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Korea imports gas meter, mainly from China and to a lesser extent from Germany.98% of Korea`s gas
is imported,and as such,activity in the country focuses on transmission and distribution.

The reatil gas distribution market;which is monopolised by 28 city gas companies in each region,will
be gradually opened to competition based on the outcome of the restructuring of the wholesale
market.

Distribution pipelines in South Korea extend to 19,681 km.

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Korea is planning one of the most ambitious advanced metering projects in the world.It combines
metering with home services and communications using PLC.

In 2004,Korean government announced plans to pursue a new generation of value-added energy

business by combining electricity and IT and announced.In 2004 KEPCO,Korea`s electricity utility
announced the launch of a full-scale PLC home networking business,combining power and IT through
PLC.The services trailed included AMR and various other home services.

KEPCO plans to have its research programme for a `smart`grid completed by 2013.All ploting will be
completed in 2009 and deployment of AMR/AMI will commence in late 2009.KEPCO is planning to
replace all analogue electricity meters with digital power meter by 2015 ,involving 22 million
households.