Nuclear energy is back in style, and Korea wants in

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Nuclear energy is back in style, and Korea wants in

Published: 10 Jul. 2022, 07:00

President Yoon Suk-yeol visited the production plant of Doosan Enerbility in Changwon, South Gyeongsang, on June 22. [YONHAP]

Nuclear power is making a major comeback worldwide, including in Korea, and the country is eager to seize the rising opportunities.

After the Fukushima nuclear power disaster in 2011, the world shifted away from nuclear energy. Recently, many countries are changing their tune amid growing instability in the energy supply, labeling nuclear power as green despite the inherent risk associated with potential leaks.

Korean nuclear energy companies are looking to ride the wave, expanding their presence in the global nuclear power market using the price as a weapon.

Korea's nuclear power plant business has essentially three pillars: the construction business, the equipment business and the small modular reactors (SMRs) business, though the SMRs are still in development. While Doosan Enerbility, the only company in Korea that manufactures key equipment for nuclear power plants, is exporting components, Korea's overseas nuclear business is mostly centered on construction.

Hyundai Engineering & Construction (Hyundai E&C), which built the nuclear power plant in Barakah, United Arab Emirates with Samsung C&T, is strengthening ties with overseas companies and acquiring technologies that allow for a wide range of activities, including plant construction, decommissioning and SMRs.

In May, Hyundai E&C signed a strategic cooperation agreement with Cranberry Township, Pennsylvania's Westinghouse, one of the biggest nuclear power companies in the world, in a bid to enter the U.S. large nuclear reactor market with a focus on engineering, procurement and construction.

The company agreed last year to co-develop SMRs with Jupiter, Florida's Holtec International and won a nuclear plant decommissioning project from Holtec in March.

Daewoo Engineering & Construction (Daewoo E&C) is participating in Team Korea, a consortium led by Korea Hydro & Nuclear Power (KHNP), to compete for an 8-trillion-won ($6.2 billion) nuclear plant project bid in the Czech Republic.

The company won a 36.3-billion-won project for a research nuclear power facility from KHNP in April, and is also constructing radioactive waste disposal facilities in Korea. Daewoo E&C is also part of a Kepco-led consortium to invest in SMR technologies.

Doosan Enerbiltiy plans to further expand its market to Europe. The company said Thursday that its nuclear power business acquired ISO 19443 certification, which is an international safety and quality standard for nuclear power-related products and services, in order to enter the European nuclear market. Many European countries require ISO 19443 certification from nuclear plant component suppliers as a basic condition.

"We will continue to enhance the safety management, and expand the market into Europe and other regions," said Na Ki-yong, head of Doosan Enerblity's nuclear power unit.

Korea began to export nuclear parts in the 1990s and started building reactors overseas in the 2000s.

Led by Korea Electric Power Corp. (Kepco), a consortium of Korean nuclear power companies — including Kepco E&C, Doosan Enerbility, Hyundai E&C, Samsung C&T, and KHNP — landed a $20-billion contract to build the nuclear plants in Baraka in 2009.

Thirteen years later, the project is heading toward completion, but Korea hasn't been able to win any plant deals since Barakah. Companies, as well as the government, want to change that.

The war in Ukraine and soaring fuel prices have put a renewed emphasis on energy security. Struggling between ambitious carbon neutrality goals and jitters over the energy crisis, nations globally are eyeing nuclear energy as a realistic alternative, creating new opportunities for the industry.

Protesters take part in a demonstration supporting nuclear energy in Strasbourg, France, Wednesday. European Parliament voted in favor of European Commission's decision to grant a green label to gas and nuclear energy that day. [AP/YONHAP]

President Yoon Suk-yeol pledged to scrap the previous administration's phase-out scenario and ramp up investments to sell more than 10 new nuclear plants overseas by 2030.

The government is bidding for major global projects, including the 1,200-megawatt reactor in Dukovany, the Czech Republic and plants in Poland with a total of 6,000- to 9,000-megawatts of capacity. There are also upcoming projects in the Netherlands, Romania and Kazakhstan.

Korea;s competitiveness is pricing.

It cost $2,157 per kilowatt-electric (kWe) for Korea to construct a nuclear plant, according and International Energy Agency's 2020 report. The price is $4,013 per kWe for France, $4,250 for the U.S., $2,271 for Russia and $2,500 for China.

SMRs are also being eyed.

SMRs are generally smaller reactors that can produce 300 megawatts of power or less, compared to the average of about 1 gigawatt for conventional reactors. Manufactured as units, SMRs are believed to have greater scalability and siting flexibility.

Korea has been developing SMRs since 1997. Smart, or System-integrated Modular Advanced Reactor, has been co-developed with Saudi Arabia and received Standard Design Approval from the Korean government. Korea was supposed to set up a joint venture in Saudi Arabia to build a Smart SMR in the country, but it is currently being delayed due to unfavorable business conditions.

A government-led project to develop the next generation SMRs is underway as well.

The Yoon administration promised to invest roughly 400 billion won in the development of the next generation of SMRs in its first energy policy plan released Tuesday. And the private sector is speeding up research and development of SMRs as well by signing contracts or non-binding agreements with overseas companies.

Doosan Enerbility has made a $103 million strategic investment in Portland, Oregon's NuScale Power. The two companies signed a deal to produce SMRs in April, with NuScale designing the equipment and Doosan overseeing the production. Doosan Enerbility aims to start producing SMRs in the latter half of 2023.

The company also signed an engineering service agreement with Rockville, Maryland's X-energy last year, to design and build a prototype of X-energy's SMR, an 80-megawatt electric reactor.

In April, GS Energy, Doosan Enerbility and Samsung C&T signed a memorandum of understanding with NuScale, outlining the construction and operation of SMRs.

GS Energy invested an undisclosed amount of money into NuScale, and Samsung C&T invested $70 billion. Samsung C&T said in May that it is in discussion with NuScale to cooperate in the planning and construction of projects in the U.S. and eastern Europe.

Hyundai Engineering recently set up a nuclear power division to increase investments in SMRs and related businesses. The company signed a deal with the Alberta provincial government of Canada last year to build 100-megawatt SMR in Alberta.

SK Inc. and SK Innovation agreed to develop, construct and market SMRs with TerraPower, co-founded by Bill Gates, in May.

Korea' nuclear industry has been contracting over the past few years. Compared to 2016, the combined revenue of nuclear energy companies declined from 5.5 trillion won in 2016 to 4.1 trillion won in 2020. Nuclear energy sales overseas plummeted 73 percent from $126 million to $33 million during the same period, while the workforce contracted from 22,000 to 19,000.

"Our nuclear energy industry is on the verge of annihilation," the president said during his visit to Doosan Enerbility on June 22, citing the Moon Jae-in administration's nuclear phase-out policies.

A computer-generated image of a small modular reactor plant co-developed by Hyundai E&C and Holtec [HYUNDAI E&C]

The government plans to revive the industry by spending 92.5 billion won for the restoration of nuclear power generation capacity, and to raise the target for the contribution of nuclear power to Korea's energy mix to 30 percent by 2030 from last year's 27.4 percent.

President Yoon Suk-yeol inspects a small modualr reactor displayed at Korea Atomic Energy Research Institute in Dajeon during his campaign in last November. [NEWS1]

To revitalize the market, Doosan Enerbility also promised to increase its support of business partners, including with five-year contracts, while increasing its funds supporting smaller contractors from 24 billion won to 84 billion won.

The global nuclear power industry is expected to grow 42.1 percent by 2030 to $58.4 billion from $41.1 billion in 2020, according to Allied Market Research's February report.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]