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(News Focus) Nuclear phase-out puts burden on S. Korea's export drive

2017/09/23 09:00

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By Kim Eun-jung

SEOUL, Sept. 23 (Yonhap) -- South Korea's nuclear phase-out policy may create a boom for the renewable energy initiative and allay public safety concerns, but it may also send an unwanted signal to the outside world that could hurt the country's push to expand into the global atomic power generation market.

Since taking office in May, President Moon Jae-in has scrapped plans for new nuclear power plants and vowed not to extend the life cycles of 24 existing reactors, in a bid to end decades of reliance on the controversial energy source.

The latest move was aimed at addressing safety concerns after the 2011 Fukushima disaster and is in line with actions taken by other advanced economies that are turning to renewable energy sources, including the U.S., France and Germany.

An environmental activist stages a mask performance to oppose nuclear power during a Seoul rally Sept. 12, 2017, to mark the first anniversary of South Korea's largest recorded earthquake. The quake hit Gyeongju, located 370 kilometers southeast of Seoul, which is home to six nuclear reactors. The picket reads, "Don't forget the Gyeongju earthquake. Remember Fukushima." (Yonhap) An environmental activist stages a mask performance to oppose nuclear power during a Seoul rally Sept. 12, 2017, to mark the first anniversary of South Korea's largest recorded earthquake. The quake hit Gyeongju, located 370 kilometers southeast of Seoul, which is home to six nuclear reactors. The picket reads, "Don't forget the Gyeongju earthquake. Remember Fukushima." (Yonhap)

This drastic turn from past administrations' pro-nuclear policies, however, raises questions over South Korea's status in the global nuclear market, which has seen spike in competition with the rise of state-backed Russian and Chinese companies in recent years.

Seoul policymakers have pledged continued support for overseas projects separate from its domestic energy policy, but industry insiders worry that less enthusiasm for nuclear power could shrink investment in advanced nuclear technologies and give South Korea less bargaining power on the global stage.

"Most nuclear reactors in South Korea are located in populous regions, which poses a greater risk in the event of a natural disaster like an earthquake," Paik Un-gyu, Minister for Trade, Industry and Energy, said Sept. 12 during a visit to a nuclear reactor in Gyeongju, a city in southern South Korea that has experienced earthquakes. "Regardless of the domestic policy, the government will fully support the industry's efforts to export nuclear reactors to foreign countries."

   That view was bashed by opposition lawmakers who called the nuclear exit plan a "self-harming strategy."

   "(The government) says nuclear power exports are separate (from the domestic nuclear phase-out), but no one believes it," Rep. Joo Ho-young, the floor leader of minor opposition Bareun Party, said Thursday. "Who would buy (nuclear reactors) sold by a country that tries to abandon using them? I think the government is interfering with efforts to export nuclear power plants rather than helping."

   With big projects on the horizon in the Middle East and Europe, it has become an even more pressing issue.

Saudi Arabia is set to announce a plan to build two nuclear reactors to reduce its reliance on oil, drawing keen interest from major players.

The upcoming project is seen by South Korea as a second chance for major involvement in plans for nuclear power in the Middle East, following a US$ 20 billion contract in 2009 to build four reactors in the United Arab Emirates (UAE).

This photo provided by Korea Electric Corp. on Oct. 20, 2016, shows a nuclear power plant under construction in Barakah in the United Arab Emirates. (Yonhap) This photo provided by Korea Electric Corp. on Oct. 20, 2016, shows a nuclear power plant under construction in Barakah in the United Arab Emirates. (Yonhap)

Korea Electric Corp. (KEPCO), a state-run power provider, has been actively marketing Korean-designed reactors with local builders to tap into the lucrative market. And the Korea Atomic Energy Research Institute in 2015 signed an agreement with Saudi Arabia's King Abdullah Economic City to assess the potential for building at least two Korean reactors and possibly more.

"South Korea expressed hope that the nuclear program in the UAE would provide a good indicator for the Saudi Arabian project, (and would signal) increased cooperation in the nuclear energy field as well as other areas," Seoul's commerce ministry said, after a South Korean delegation held a bilateral meeting with Saudi officials in Austria this week.

While South Korea was able to grab its first overseas deal with strong support from the government for financing packages and ensuring the reliability of the building schedule, it would be a much tougher sell in the case of Saudi Arabia.

Industry insiders say both a strong domestic market and an aggressive nuclear export program are needed to increase South Korea's market share and preserve its ability to secure a chunk of the global market.

"The new power supply plan should reflect the domestic construction of new nuclear reactors at a minimum level so as to maintain South Korea's advanced nuclear technology and competitiveness and continue its export drive," Im Cheon-seok, a senior official at Korea Plant Service & Engineering, a KEPCO subsidiary, wrote in a column July 29.

"It may be good to spend an astronomical amount of money to create new domestic jobs, but I hope South Korea earns foreign currency from nuclear plant exports and creates jobs overseas."

  

Labor union members of the Korea Hydro & Nuclear Power Co., South Korea's sole operator of nuclear power, protest the suspension of construction of two nuclear reactors, Shin Kori Nos. 5 and 6, in Ulsan, 414 kilometers south of Seoul, on Sept. 9, 2017. (Yonhap) Labor union members of the Korea Hydro & Nuclear Power Co., South Korea's sole operator of nuclear power, protest the suspension of construction of two nuclear reactors, Shin Kori Nos. 5 and 6, in Ulsan, 414 kilometers south of Seoul, on Sept. 9, 2017. (Yonhap)

KEPCO has also been in talks to buy a stake in the Toshiba-Engie British joint nuclear venture NuGen, which has run into major financial difficulties. A Beijing-controlled company is also in the running for the deal estimated at around $20 billion.

In eastern Europe, Seoul has been reaching out to the Czech Republic, which is interested in building its first nuclear power plant in the coming years.

While traditional leaders in this field, including the U.S. and France, are slowly losing their dominant positions globally, Russia and China have put in aggressive efforts to sell their nuclear power plants abroad with cheaper price tags and attractive financing packages. The emerging players with a strong nuclear expansion plan at home have successfully targeted developing nations, which are seeking a smaller carbon footprint to meet both growing energy demand and emission targets set by the Paris Agreement.

If technological innovation under the changing energy industry landscape becomes an elusive goal, the government should at least strategically provide support for local engineers and suppliers to maintain a robust supply chain and safely operate the existing fleet over the coming decades, experts say.

"To prepare overseas sales of Korean-designed reactors, parts suppliers should remain in the market," said Lee Sang-hoon, the director of nuclear power certification at the Korea Institute of Materials Science. "After 2020, the number of domestic reactors older than 30 years will greatly increase. The supply chain needs to remain robust in order to secure the safety of operating units by maintaining and repairing existing parts."

   ejkim@yna.co.kr

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