Beating the oddsIt is hard to let go of the euphoria and sensation of seeing Korea win its first deal to export nuclear reactors in one of the world’s largest and most hotly contested contracts. The entire population is united in rejoicing over the news from Abu Dhabi that the United Arab Emirates chose a consortium led by the state-run Korea Electric Power Corp. to build multibillion-dollar nuclear reactors in the Middle East.
A half-decade of hard labor in reactor labs and the support of President Lee Myung-bak helped the nation reap the benefits of decades of investment in alternative energy sources. Nuclear energy is expected to be a major source of growth for our export-driven economy. The government and Kepco plan to apply their teamwork to compete for third-generation contracts in Turkey and Jordan as well.
Korea’s surprise win was based largely on its bidding and operational skills. Yet Korea has a lot to learn and overcome before it joins the ranks of top-class reactor manufacturers. The construction of a nuclear power plant requires three essential technologies - a reactor coolant pump, a code system and man-machine interface systems. Together, these make up 5 percent of the total amount of technology needed, with the remainder of the technology needed to build the basic infrastructure.
The Kepco consortium includes Westinghouse, which contributed the bulk of the design and construction technology, and its parent company Toshiba. In the process of fulfilling the contract, Korea may end up enriching its foreign consortium members.
Kepco and other local corporate consortium members like Doosan Heavy Industries and Construction plan to start manufacturing the plant’s key components locally. But it will take time for their technology to pass an international standardization review. Meanwhile, the Korean companies must also ensure that spent fuel is reprocessed safely so that nuclear waste is not recycled for non-peaceful purposes. This means that to be completely free to export nuclear energy technology, the government should also revise its nuclear agreement with the United States so that it is similar to Japan’s.
We expect our corporations to make greater strides into the nuclear energy industry, which is estimated to be worth more than $1 trillion.
In winning this deal, Korea has beat the odds. But we need to ensure that this is more than a one-time windfall.