Concerns raised over South Korea’s Czech nuclear export deal

Allegations are rising that Korea Hydro & Nuclear Power and Korea Electric Power Corporation signed an unfair contract with U.S. company Westinghouse Electric Co. (WEC) to export a nuclear power plant to the Czech Republic. The deal reportedly gave WEC priority for contracts in the European Union, North America, the United Kingdom, Japan, and Ukraine, effectively surrendering potential orders. The agreement also reportedly requires that for the next 50 years, each exported reactor include roughly 900 billion won in goods and services purchases from WEC, as well as about 240 billion won in technology fees.

If the contract proceeds as reported, South Korea’s position in the nuclear power market could shrink significantly, contrary to the Yoon Suk-yeol administration’s expectation that the Czech reactor deal would serve as a foothold in Europe. Even if Korea succeeds in exporting a reactor, concerns have emerged that profitability could decline after guaranteeing work for WEC and paying royalties. The agreement also reportedly requires passing WEC’s technology independence verification when exporting small modular reactors (SMRs), which could hinder future nuclear technology development. A thorough review and verification of the contract terms are essential.

Questions have also arisen over whether the Yoon administration made excessive concessions to claim the nuclear export as an achievement. In July last year, when Korea Hydro & Nuclear Power and Korea Electric Power Corporation were selected as preferred bidders for a new 24 trillion won Czech nuclear plant, the presidential office hailed it as a “milestone in 15 years,” boosting the president’s approval ratings. However, the following month, WEC filed a complaint with Czech antitrust authorities citing intellectual property violations, raising doubts about the final contract. In response, the boards of Korea Hydro & Nuclear Power and KEPCO approved cooperation principles with WEC in November and agreed in January to halt the intellectual property dispute. It is important to determine whether the companies accepted an unfair contract under government pressure to expedite the agreement.

However, some argue that the agreement with WEC was unavoidable to secure a path for nuclear exports. Without resolving the intellectual property dispute with WEC, which controls the underlying technology, exporting would have been impossible. There are also prospects that cooperation with WEC could open the door to the U.S. market, where the country plans to expand by 300 reactors. The contract process, procedures, terms, and implications must be carefully examined to allow a comprehensive cost-benefit assessment. Minister of Trade, Industry and Energy Kim Jeong-gwan said, “We understand the nuclear contract was conducted properly,” suggesting that excessive political interpretation should be avoided. A thorough investigation and careful assessment are needed to reconsider South Korea’s long-term nuclear export strategy.