Korea wants to build first Saudi nuclear power plant

Economy

Published: 16 Nov. 2022, 16:18 Updated: 16 Nov. 2022, 17:33

Korea wants to build first Saudi nuclear power plant

Barakah nuclear power plant in United Arab Emirates. It's the first and only nuclear plant that Korea has built abroad. Korea is currently contending for the nuclear power reactors in Saudi Arabia. [YONHAP]

Expectations that Korea could build Saudi Arabia’s first nuclear power plant are rising with the visit of Crown Prince Mohammed bin Salman Al Saud, the kingdom’s prime minister, starting Thursday.

This is the crown prince's first visit to Seoul since June 2019.

Saudi Arabia has shown significant interest in Korean technology since it was used to build the Middle East’s first nuclear reactor in United Arab Emirates. That project in Barakah was landed by Korea in 2009 and went on line in April 2021.

The Korean government has yet to confirm a one-on-one meeting between Prince Mohammed and Korean Trade, Industry and Energy Minister Lee Chang-yang, although the minister's schedule as of Wednesday was open.

Korea Electric Power Corp., which is playing the main role in the Saudi nuclear power plant sales pitch, confirmed that there is no scheduled meeting between its CEO, Cheong Seung-il, and Prince Mohammed.

Kepco won the competition to build the Barakah nuclear plant 13 years ago.
“Nuclear sales pitches are a complicated process that require a cautious approach,” said a government official.

Korea is hoping to win the nuclear power plant project from Saudi Arabia as well as contracts in its NEOM city project.

Trade Minister Lee noted the world’s increasing recognition of Korea’s nuclear energy technology during a government emergency economic meeting that was televised last month.

“Our nuclear energy industry has struggled [under the nuclear rollback policies of the previous administration],” Lee said during the meeting, which was presided over by President Yoon Suk-yeol.

“The global energy market will continue to expand with the ongoing energy crisis,” Lee said. “And as such we need to continue to foster it into a core industry and a major export industry.”

He pointed out that nuclear energy exports have a lot of government involvement.

“Related [government] departments need to work together in creating a customized package,” Lee said.

Since Yoon became president in May, Korea has had success in winning nuclear power plant contracts including in a Russia-backed El-Dabaa nuclear power project in August.

Minister of Trade, Industry and Energy Lee Chang-yang and Jacek Sasin, Minister of State Assets sign a memorandum of understanding on cooperation between the two countries on nuclear energy development in Seoul on Monday. [YONHAP]

Last month, Korea was picked as the sole bidder for the Patnow nuclear power plant in Poland.

The Patnow project is a small nuclear energy plant being built by a Polish energy company. The much larger state-backed Lubiatowo-Kopalino nuclear power plant was won by Westinghouse Electric of the U.S.

Yet the Polish deal is still considered a win.

“It is a major step that has come after a long wait,” said Moon Kyeong-won, a Meritz Securities analyst.

One of Yoon’s goals is exporting 10 nuclear power plants by 2030.

In 2018, Prince Mohammed officially announced Saudi’s nuclear power plant project as part of the kingdom’s ambitious goal of diversifying its energy mix and helping the global battle against climate change.

Two nuclear reactors with 1.4 gigawatt capacities are expected to be built initially, which will gradually increase to 16 by 2040.
Competing for the business are Korea, France, China and Russia. Riyadh invited them to make bids in June. Westinghouse was excluded.

In April, Saudi Arabia set up the Saudi Nuclear Energy Holding Company, which will manage the development and operation of the nuclear plant. In September, it announced that it was starting a process to issue a license for the nuclear power plant site.

“Within the framework of the Saudi National Atomic Energy Project, we are working in cooperation and coordination with the Agency to develop and implement national plans to facilitate the contribution of nuclear energy to the national energy mix and meet national development requirements,” said Energy Minister Abdulaziz bin Salman Al Saud in September at the International Atomic Energy conference in Vienna.

He said Saudi Arabia's licensing of the nuclear power plant will start once a comprehensive study of the candidate sites is completed.

Riyadh has been reported to have shown interest in the Korean nuclear reactor in Barakah. The Korean government has been emphasizing its companies expertise in building that plant in a desert.

“As Korea’s advanced technological skills and management experience have been proven with the UAE Barakah nuclear power plant, we expect Korea could contribute to Saudi’s nuclear energy policy,” Korean Finance Minister Choo Kyung-ho said in a meeting with Saudi Finance Minister Mohamed bin Abdullah Al-jadaan last month in Washington.

Korea also has price competitiveness.

According to the World Nuclear Association, the construction unit costs of the APR 1400, a nuclear reactor using Korean technology, is $3,571 per kilowatt. The comparative figure for China's reactor is $4,174; U.S. $5,833; Russia $6,250 and France $7,931.

During a visit to the plant in Barakah, Saudi Energy Minister Abdulaziz bin Salman noted that it is a “pioneer.”
“Nuclear energy technologies play a vital role in diversifying energy sources and the economy to achieve sustainable development,” he said.

Korea's technology is also recent. Although the U.S. has the core technology, it has not built an overseas nuclear plant in the last 40 years.

Westinghouse’s Plant Votgle project in Georgia is facing major delays that is adding costs.

Korea also has more relaxed regulations. In 2011, Seoul and Riyadh signed a nuclear cooperation agreement that allows the Saudis to enrich up to 20 percent of the uranium supplied, without Seoul’s consent.

Korea's government has been ramping up its cooperation with Riyadh, and financing may be part of its pitch.

Minister of Trade, Industry and Energy Lee Chang-yang attends the Nuclear Energy Exports Strategy Committee meeting in September. The committee, which was launch in August, aims at promoting Korea's nuclear reactors abroad. [YONHAP]

During the second Nuclear Energy Exports Strategy Committee meeting held in September, the key issue that was discussed was large-scale, long-term funding.

The committee was launched in August and includes 30 nuclear energy-related institutions.

The government is considering of creating a “financial nuclear platform” backed by state-owned financial companies such as Export-Import Bank of Korea, Korea Development Bank as well as Korea Trade Insurance Corp.

Last month Minister Lee met with Saudi Arabia’s Investment Minister Khalid Al-Falih to discuss widening cooperation in low-carbon energy transition, fourth industrial revolution technologies as well as cultural exchanges.

On Nov. 4, Lee held a video conference with Saudi’s Energy Minister Prince Abdulaziz bin Salman regarding bilateral cooperation in energy including the utilization of hydrogen.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]