Korea’s Effort to Stand out in Global Nuclear Power Plant Market

○ Nuclear Plant Market to Double by 2030

The world’s power producers are eyeing nuclear power generation since it is environmentally-friendly and economical. Unlike thermal power generation, nuclear power produces few greenhouse gases including carbon dioxide. Moreover, it costs only 39 won for nuclear energy to generate one kilowatt of electricity. In comparison, it costs 42 won for bituminous coal and 100 won for gas to generate the same amount of electricity.

Also, uranium, a raw material of nuclear power, is abundant, unlike oil and bituminous coal whose reserves have gradually decreased.

Furthermore, nuclear power safety management technologies have developed immensely since the 1979 accident at Three Mile Island Unit 2 (TMI-2) nuclear power plant in the U.S.

Heo Yeong-seok, executive director of Korea Power Engineering Company which designs nuclear plant fit for Korea, said, “Nuclear power plant accidents have happened not because of systematic defects but because of management mistakes. Newly built nuclear plants are designed not to allow mistakes that might result in a disastrous accident.”

International Energy Agency predicts that 790 nuclear plants will appear in 70 countries by 2030. 440 nuclear plants are now operating in 31 nations.

○ Design Technology and Talents

Korea’s nuclear plants are competitive when it comes to technology.

Having built 20 nuclear plants since it received nuclear technology from U.S. nuclear giant Westinghouse Electric Company in the early 1970s, Korea has developed Korean standard nuclear plant model OPR1000 and its own model APR1400.

Moreover, construction cost per kilowatt of APR1400, of which over 95 percent is Korean technology, reached $2,000. It is at least 30 percent cheaper than a comparable U.S. model whose construction cost per kilowatt amounts to $3,000.

Korea has successfully secured the latest design technologies and outstanding talent since it has built nuclear plants beginning in the 1970s, unlike the U.S. which stopped building nuclear plants in the early 1980s.

However, Korea is restricted from exporting its nuclear technology. Since Westinghouse owns the source technology related to the nuclear reactor, Korea has to get the approval of the U.S. firm whenever it is required to transfer relevant technologies for nuclear power plant import.

Ji Gye-gwang, head of KOPEC’s business development team, said, “Turkey and Indonesia, which are about to import Korea’s nuclear plants, did not ask Korea to transfer relevant technologies. That means prospects for Korea are bright. Also, Korea is expected to achieve technology independence by 2015, instead of depending on U.S. source technology. For the moment, the potential for Korea to export its nuclear power plants will increase.”

○ Three Powerhouses are an Obstacle

However, it is far from easy for Korea to enter the global nuclear power plant market, which has long been dominated by the U.S., France, and Japan.

For their part, the U.S. and France have their own source technologies and Japan has also secured its own source technologies by acquiring an 80 percent share of Westinghouse two years ago.

Making matters worse, major firms of the three nations have already chosen their business partners among themselves. That has added to difficulties for Korean firms to stand out in the global market.

Worse yet, it’s not only technologies but also international politics that affect the export of nuclear power plants.

Executive Director Heo said, “Still, Korea’s state-owned firms face mounting difficulties going overseas. The government needs to allow state-owned firms to negotiate with nuclear plant importers in a flexible manner.”

changkim@donga.com