'We're back to square one': Nuclear manufacturers fear return to phaseout policy

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'We're back to square one': Nuclear manufacturers fear return to phaseout policy

Published: 15 Oct. 2025, 12:18

Audio report: written by reporters, read by AI

A view of Youngjin Techwin's factory, a nuclear power plant equipment manufacturer in Changwon, South Gyeongsang, that only recently resumed factory operations after work was cut off during the nuclear phaseout [SHIN SU-MIN]

CHANGWON, South Gyeongsang — As Korea’s new government signals another pivot away from nuclear power, small reactor-part manufacturers in cities like Changwon fear a return to the bleak years of the previous phaseout policy, warning that the industry can’t survive policy whiplash every election cycle.

“There’s nothing I can do — we’re back to square one,” said Kang Seong-hyeon, the CEO of Youngjin Techwin, speaking from his factory in Buk-myeon, Uichang District, Changwon, South Gyeongsang on Sept. 29. “We had hope that things were finally looking up, but now that the government has changed, we’re back where we started. I really don’t understand why nuclear energy is so swayed by politics.”

Youngjin Techwin manufactures essential parts for nuclear power plants, such as control rod drive mechanisms and reactor coolant pumps. When visited that evening, the plant was buzzing with machinery well into the night, giving the impression of prosperity. But according to Kang, the factory had only resumed operations less than two months earlier.

“It was only after the Yoon Suk Yeol administration approved restarting construction for Shin Hanul Units 3 and 4 [nuclear reactors] in July 2022 that we finally received work,” he said. “The past three years have been a true ordeal.”

Orders typically take at least three years to go from production to delivery. During the Moon Jae-in administration's nuclear phaseout, the company managed to survive on residual orders — but after those dried up, business came to a halt. Annual revenue fell from 3 billion won ($2.1 million) to 800 million won.

“Last year, we reported 1.5 billion won in revenue, but that was because we sold off high-value equipment to repay debt,” Kang said. “We tried to diversify to stay afloat but ended up being scammed, doubling our debt. Our machines cost hundreds of millions of won each, and we invest heavily when we buy them. But if policy flips with each administration, how can we keep up?”

Kyungsung Electric in Busan’s Noksan Industrial Complex, a supplier of core nuclear equipment, faces a similar situation. Both its workforce and revenue have been cut in half.

“It was extremely difficult,” said Executive Director Han Tae-gyo. “I seriously considered shutting down the company.”

Kyungsung Electric’s backlog of orders, once over 12 billion won, fell to 4 billion won after the nuclear phaseout. More than half of its technical staff left for other industries.

“All we’ve ever relied on is nuclear energy, and the constant policy shifts every time the government changes make it unbearable,” Han said. “From what we’re seeing now, it feels like there’s no intention to build any more domestic plants. It’s very unsettling.”

In an Oct. 1 interview with the JoongAng Ilbo, Climate, Energy and Environment Minister Kim Sung-whan said the government plans to triple renewable energy production during its term, and it would consider extending the lifespan of existing nuclear reactors — if safety can be ensured.

When asked about the two new reactors planned under the 11th Basic Plan for Electricity Supply and Demand, he said the administration would first “listen to public opinion,” raising the possibility of cancellation.

Kim added that expanding renewables while lowering generation costs would reduce pressure on electricity bills, but experts remain skeptical.

Climate and Energy Minister Kim Sung-whan speaks during a meeting at the Korea Power Exchange's Gyeonggi office in Uiwang, Gyeonggi on Oct. 2. [NEWS1]

Policy whiplash rattles suppliers

“Once infrastructure costs such as energy storage systems and transmission networks are factored in, renewables are the most expensive energy source,” said Sonn Yang-hoon, a professor of economics at Incheon National University. “If we dramatically increase reliance on renewables, electricity prices could skyrocket,” he said.

For companies in the nuclear supply chain, the phaseout policy was a nightmare they hoped never to revisit. The hardest hit were the small subcontractors that manufacture the countless components used in reactors. Their survival depends entirely on government policy.

Total nuclear industry revenue fell from 27 trillion won in 2016 to 20 trillion won in 2018, recovering only to 25 trillion won in 2022, according to a 2022 report by the Korea Atomic Industrial Forum (KAIF).

Doosan Enerbility’s orders to partner firms plunged from 192.4 billion won in 2015 to 76.9 billion won in 2021. In 2022, under the pro-nuclear Yoon administration, orders rebounded to 154.1 billion won across 400 suppliers — a welcome reprieve.

Still, a 2023 KAIF survey of 1,037 domestic nuclear firms showed that 32.2 percent cited a lack of stable contracts as their greatest obstacle to competitiveness. The recovery is far from complete.

President Lee Jae Myung speaks during a press conference marking his first 100 days in office at the Blue House on Sept. 11. [JOINT PRESS CORPS]

Industry says nuclear future looks dim at home

Now, with the Lee Jae Myung administration signaling a return to phaseout policies, the industry is on edge.

At a nozzle manufacturing firm in Changwon Industrial Complex, an executive surnamed Hwang voiced his frustration.

“The president’s tone changed before and after the election,” Hwang said. “It feels like we’re reliving the nightmare of five years ago. He promised to support nuclear energy, and now he’s talking about ‘reviewing’ it. That means canceling it.”

Many fear a repeat of the Moon administration's 8th Basic Plan, which scrapped six new reactors and halted the extension of 10 aging ones. Wolseong-1 was effectively shut down despite being cleared for extended operation.

During his campaign, Lee pledged to include nuclear in Korea’s energy mix, fueling optimism in the industry. When U.S. President Donald Trump signed executive orders aiming to expand nuclear capacity to 400 gigawatts by 2050, expectations rose. Doosan Enerbility’s stock, which had hovered around 25,000 won, surged past 70,000 won by June.

But at a press conference marking his first 100 days in office on Sept. 11, Lee struck a different tone: “It takes 15 years to build a nuclear plant. Even if we had land and safety measures in place, I don’t see it as realistic.”

A view of Kyungsung Electric in Busan’s Noksan Industrial Complex, where both sales and workforce were halved due to the nuclear power plant policy that fluctuated with each change in government [SHIN SU-MIN]

Climate and Energy Minister Kim echoed this shift, proposing “public discussion” on previously confirmed projects, implying potential cancellations. The delay in the 10-year extension approval for Kori-2, another nuclear reactor, also appears related. At a Sept. 25 meeting of the Nuclear Safety and Security Commission, no decision was made — safety concerns were reportedly raised again.

“The fact that the restart review agenda has been submitted means that the licensing criteria have already been passed,” said Chung Bum-jin, a professor of nuclear engineering at Kyung Hee University. “Raising the issue of 'safety' is likely a political decision.”

During debates as a candidate, Lee had said, “Let’s continue using the reactors we already have, and if safety is ensured, even consider using those beyond their design life.”

Given the circumstances, some suggest Korea should shift its focus to exports — but many are skeptical.

The gate to Bongam Industrial Complex in Changwon, South Gyeongsang [SHIN SU-MIN]

“If we don’t maintain a viable domestic market, how can we expect to export?” said Han from Kyungsung Electric. “Sustained domestic demand is necessary to build the expertise and credibility required for overseas deals.”

Some who exited the nuclear industry feel vindicated.

“I feel like I made the right decision,” said a former supplier of electric marking devices in Masan Bongam Industrial Complex.

After struggling with a more than 30 percent drop in revenue during the phaseout, the firm switched industries entirely.

“If the business landscape changes every five years, how can anyone invest?” the CEO Kang asked. “They’re basically telling us to shut down.”

The Kori Nuclear Power Plant Unit 2, second from the right, and Kori Nuclear Power Plant Unit 1, right, which was permanently shut down in June after eight years, as seen from a port in Gijang-gun, Busan on Sept. 25 [SONG BONG-GEUN]

Energy policy should not be a one-off

One company that used to make auxiliary parts for new reactors said it was forced into diversification.

“We don’t build new plants anymore, so we do whatever comes our way — construction, maintenance, service,” said a representative, who wished to remain fully anonymous. “But diversification is hard. Nuclear work is highly specialized, and it’s tough to find skilled labor. With rising labor costs and falling revenue, debt repayments become a burden.”

In this environment, R&D is out of the question.

“If this continues, Korea's nuclear sector could lose its technological edge and simply fade away,” said one industry insider. “Foreign competitors like China will fill the gap.”

On Oct. 2, the Turkish government named Korea, Canada and China as candidates for a new nuclear power plant project.

But the biggest long-term concern is the instability of the workforce. Constant policy flip-flops make it difficult to train and retain skilled personnel.

“We’ve lost half our workers, and finding skilled ones now is like finding a needle in a haystack,” said Han. “When work pauses due to policy, people lose experience and skills, and the industry shrinks.”

“It’s not just the companies — the competitiveness of the entire industry is deteriorating,” he added.

Minister of Climate, Energy and Environment Kim Sung-whan speaks during an interview with the JoongAng Ilbo at the National Assembly in Yeouido, western Seoul on Sept. 30. [LIM HYUN-DONG]

Kang agreed, saying, “30 percent of our workforce was cut during the phaseout, and with no sales, we couldn’t hire new people. Our least experienced worker now has five years on the job — but that doesn’t mean they’re skilled.”

The number of employees in Korea’s nuclear supply chain peaked at 22,000 in 2016 but dropped to 18,000 by 2021.

“The real issue is the lack of a long-term road map for the nuclear industry, regardless of which party is in power,” said Yang Seung-hoon, a professor of sociology at Kyungnam University.

“Energy policy requires expertise and precision,” Chung added. “You can’t treat it like a mayfly.”

Meanwhile, other countries are doubling down on nuclear. China is pushing ahead with plans to increase its reactors from 58 to 180 by 2035 to support its advanced manufacturing sector.

A Bloomberg report on Sept. 29 projected that U.S. nuclear capacity will grow by 63 percent by 2050, with dozens of companies currently developing small modular reactor designs.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY SHIN SU-MIN [[email protected]]