As Korea kills reactors, utility firm looks abroad

Korea’s state-owned nuclear power supplier will shift focus to markets abroad and provide comprehensive energy solutions as nuclear power is phased out at home, the company’s chief executive said on Thursday.

Chung Jae-hoon, the CEO of Korea Hydro and Nuclear Power, said every effort is being made to search for opportunities in “strategic markets” including the Czech Republic, Slovakia, Poland and the Philippines.

“We will knock on any door, seeking whatever benefits we can get,” Chung said during a meeting with reporters in Ulsan, home of the Shin Kori 3 nuclear reactor. “The Korean nuclear power industry can survive as long as it finds ways to complement its business model.”

Korea has 24 nuclear reactors that generate about 30 percent of the country’s electricity, but the government has vowed to boost the supply of power from clean and renewable energy sources while reducing reliance on nuclear and coal-fired plants.

The energy transformation policy has directly hit Korea Hydro and Nuclear Power, which earns most of its profit from selling electricity to its parent company, the Korea Electric Power Corporation.

“In the past, Korea Hydro and Nuclear Power could make a profit only by operating nuclear reactors,” Chung said, “but whether we wanted it or not, we were hit by an external shock, and as we were forced to make changes, it made us go to the open ocean and seek new opportunities.”

Korea Hydro and Nuclear Power predicts annual net profit of 12.5 billion won ($11.6 million) for this year, down 98.5 percent from 861.8 billion won in 2017. Its net profit in 2017 fell from 2.47 trillion won in 2016 because of the low operational rate of reactors, which was at 71.2 percent in 2017, the lowest in two decades.

The company forecasts a rise in electricity sales this year over last year to 10.25 trillion won but expects the gain to be eroded by the lower use of reactors and general rise in operational costs. “We are going through some hard times right now,” Chung said, “but will show a better performance next year.”

In addition to exports of nuclear reactors, Chung said his company would explore ways to increase profit from other sources, including energy consulting, maintenance and data management.

“Although the hardware business is the company’s cash cow right now, it’s time to start making efforts to become a company that can provide consulting services and big data, based on our 35 years of business, to emerging nations,” he said.

Korea Hydro and Nuclear Power has been vying for a nuclear reactor project in Saudi Arabia, its second in the Middle East after a $20 billion contract with the United Arab Emirates in 2009.

The Czech Republic is expected to announce a financing plan for a nuclear reactor later this year, while the Philippines is pushing again for the revival of nuclear power to meet rising energy demand in its fast-growing economy.

Yonhap