Korea Looks to Explore Global Nuclear Power Market

Nuclear plant deal with the UAE certifies Korea’s competitive edge in the resurging market

Korea has recently joined the club of nuclear power exporters by landing a $40 billion nuclear power plant contract with the United Arab Emirates.
By capitalizing on the expertise and experience it has accumulated while building and operating 20 nuclear power units over the past three decades, the nation is now poised to develop the nuclear power industry into its mainstay exporting industry following such Korean success stories as the shipbuilding and semiconductor industries.
Predicting that the global nuclear power market is projected to grow to $1 trillion by 2030, the Korean government aims at seizing a 20 percent market share with the goal of evolving into one of the global top three nuclear power exporters.
The nuclear power deal with the UAE has certified Korea’s global competitive edge in the global nuclear power plant construction industry.
Korea is now 95 percent self-sufficient technologically with the development of the Advanced Power Reactor 1400 (APR1400), a Korean-type model localized through Korea’s use of foreign technology from Westinghouse of the United States, which will be employed to build four nuclear units in the UAE. The nation is now developing APR+ with the localization of core technologies, including core code for design technology, a reactor coolant pump and a man-machine interface system, which will turn out to be wholly self-sufficient.
The following are excerpts of an interview between NewsWorld and Kim Jung-kwan, deputy minister for energy and resources at the Ministry of Knowledge Economy, who touched on the government’s plans to develop the Korean nuclear energy industry into its major exporting industry following Korea’s landing of a nuclear power plant deal with the UAE.

Question: Will you tell our readers about the details of the nuclear power deal with the UAE?
Answer: Korea has been awarded a contract to build four nuclear power units in al-Baya, 330 km west of Abu Dhabi, with a capacity of 5.6 million kW (1.4 million KWx4). A Korean consortium, led by Korea Electric Power Corp. (KEPCO), was selected in an international bidding for a package including everything ranging from construction to operation, the supply of nuclear fuel and disposal of radioactive waste. If everything is counted, including the supply of nuclear fuel and disposal of radioactive waste, the value of the contract will swell to a total of $40 billion.
The Korean team won a fierce bidding war with six nuclear powerhouse consortia including Areva and GE-Hitachi teams. Only the consortia, headed by three main contractors ― KEPCO, Areva and GE-Hitachi ― were shortlisted in the prequalification held last May 6. Westinghouse Electric Co., Toshiba and Mitsubishi were eliminated. The three consortia were selected as continuous negotiation partners last Sept. 4 after conducting a field survey between July and August.
The KEPCO team was determined as the successful bidder through working-level negotiations over all categories of the contract, including construction costs, technology, fuel supply, safety and quality guarantee.
Q: Why did the Korean consortium win the bidding?
A: It was certified by the UAE side that Korea has acquired a global competitive edge by constructing and operating nuclear power units for the past 30 years. The nation, which has built almost one nuclear power unit each year since the debut of Kori Nuclear Power Unit 1 in 1978, now has 20 units in operation.
Korea boasts of the world’s top-rated operation performance and price competiveness compared to other rivals’ reactors. The nation saw a nuclear power capacity ratio of 93.3 percent in 2008, quite higher than 89.9 percent in the United States, 76.1 percent in France, 73.1 percent in Russia, 66.7 percent in Canada and 59.2 percent in Japan. The unit price for Korea’s construction of the Advanced Power Reactor 1400 (APR1400) was the lowest with $2,300/kW in 2008, compared to $2,900/kW for France’s Fusion Power Reactor (FPR), $2,900/kW for Japan’s Advanced Boiling Water Reactor (ABWR) and $3,582/kW for the United States’ APR1000.
The nation has world-class construction experience, the latest construction methods and a powerful supply chain mechanism in all stages ― Korea Hydro & Nuclear Power Co. in charge of operation and management; KOPEC charged with design; Doosan Heavy Industries and Construction for producing equipment; Hyundai E&C and Samsung E&C in charge of construction; Korea Nuclear Fuel for the supply of nuclear fuel; and Korea Plant Service & Engineering (KPS) for maintenance.
As governments have made flat-out efforts to win mega-projects, Korea’s nuclear deal was partially owed to the Lee Myung-bak government’s full-fledged diplomatic support. Dedicated efforts by KEPCO and other participating partners paid off. Approximately 80 people from 10 companies, including KEPCO, KHNP, Doosan Heavy Industries and Construction, Samsung E&C, AMEC and Bechtel, had a task force in place in the “war room” of the KEPCO Building for the UAE bidding since last May.
The World Nuclear Association predicted last December that about 430 large-scale nuclear power units will be built by 2030, so the size of the global nuclear power market will be worth some 1,200 trillion won ($1 trillion). According to a report released by the U.S. Department of Energy/Global Nuclear Energy Partnership in 2007, 500 to 1,000 small-sized nuclear power units will be constructed by 2050.
The nuclear power plant deal with the UAE, reached last December, proved Korea’s global competitiveness based on the experience and technology the nation has accumulated for the past 30 years.
The Korean government has set an ambitious goal of joining the ranks of the global top three nuclear power plant exporting nations, calling for exporting 10 units by 2012 and 80 units by 2030 in order to acquire a 20 percent share of the global nuclear power plant construction market.
Given the recent resurgence of nuclear power, the nuclear power industry is forecast to emerge as one of Korea’s most promising next-generation exporting industries following the automobile, semiconductor and shipbuilding industries.
Q: Will you tell us about the current status and prospects of the Korean nuclear power industry?
A: Korea, which inaugurated its first nuclear power unit, Kori Unit 1 in 1978, has 20 units in four areas: four units in the Kori Nuclear Power Plant Complex, four in the Wolsung Nuclear Power Plant Complex and six in the Yongkwang Nuclear Power Plant Complex and six in the Ulchin Nuclear Power Plant Complex, and eight more under construction ― Shin Kori Units 1 through 4, Shin Wolsung Units 1&2 and Shin Ulchin Units 1&2.
The local nuclear power industry has a power generation capacity of 17.72 million kW, accounting for 24 percent of the nation’s total capacity of 72.5 million kW and takes up about a 36 percent share in the nation’s total electricity supply. A comparison of electricity supply by type showed that thermal power topped the list with a 40.7 percent share, followed by nuclear power (35.6 percent), LNG (17.1 percent), petroleum (5.1 percent), hydro power (1.3 percent) and new and renewable energy (0.2 percent).
The first national energy master plan, established in August 2008, calls for raising the ratio of nuclear power capacity from 24 percent in 2008 to 41 percent in 2030. Eight nuclear power plants are now under construction, and fewer than 10 additional units are planned.
Q: Will you elaborate on the current status and future plan of Korea’s development of nuclear power technology?
A: Since the start of commercial operation of its first unit in the 70s, the nation’s continuous technology development has raised the localization rate to 95 percent, but Korea still depends on foreign countries for a few core technologies, including core code for design technology, the reactor coolant pump (RCP) and the man-machine interface system.
Kori Nuclear Power Units 1&2 were built on a turnkey basis by foreign companies, wholly dependent on foreign technologies during the 70s.
The construction of Kori Units 3&4 as well as Yongkwang Units 1&2 was divided among contractors to help the nation acquire technology during the 80s.
Korea developed on its own the OPR1000 (Optimized Power Reactor 1000) as the nation’s standard nuclear plant during the period between 1987 and 1995. Yongkwang Units 3&4 and Ulchin Units 3&4 were built with the OPR1000.
The nation localized the APR1400 during the period between 1992 and 2002. Shin Kori Units 1&2 were built with an improved version of the OPR1000, while Shin Kori Units 3&4 are now under construction using the APR1400.
Korea’s development of the APR+ with the localization of core technologies, which is now underway during the period between 2006 and 2012, is to be applied to the planned Shin Ulchin Units 1&2.
APR1400 is a Korean-type model localized by Korea using technology from Westinghouse. APR1400 will be exported to build four nuclear units in the UAE. Since there are possible disputes over patents on original core technologies, the deal with the UAE has been done under consent from Westinghouse. APR+, developed wholly by Korea’s own technology, is designed to eliminate possible patent disputes, however.
Q: Will you tell us about the current status of constructing a low- and intermediate-level radwaste treatment facility and plans to publicly debate the treatment of spent fuel?
A: The first phase of a low- and intermediate-level radwaste treatment facility project is under way after the selection of its site in Gyeongju in November 2005. The initial stage of the project involves the construction of a radwaste treatment facility capable of storing 100,000 drums in a cave-treatment method, which is to be completed by the end of next year at a cost of 1.5 trillion won. The construction period has been extended by 30 months more than originally planned, but there are no problems regarding safety.
We’ll devote ourselves to making sure that the planned facility will be constructed in time and in a safe manner and a plan on the second phase of the project to build a facility with a capacity of 125,000 drums will be established to raise the efficiency of the facility.
The government plans to establish policies on the management of spent fuel after initially gathering a wide range of opinions from expert groups and building public consensus.
The Korean Nuclear Society, the Korean Radioactive Waste Society and the Green Korea 21 Forum will be commissioned to explore such issues as how to manage spent fuel in the mid- and long-term perspective and secure public acceptance, with experts from the nuclear power and other circles participating.
Q: Will you touch on the current status and prospects of developing new and renewable energy sources?
A: The supply of renewable energy is on the rise thanks to such government support mechanisms as a project to supply 1 million green homes and a feed-in tariff (FIT). The renewable energy supply rate edged up from 2.13 percent in 2005, 2.24 percent in 2006, 2.39 percent in 2007 to 2.43 percent in 2008.
Prompted by the expansion of the Korean and global renewable energy supply markets and active investments by companies in such fields as semiconductors and heavy industry, the renewable energy industry is building up industrial infrastructure at a faster pace. In particular, Korea has built a domestic integrated production line for photovoltaic power and has begun to export some parts and materials for photovoltaic power and wind power. The renewable energy industry aims at raising its export goal from $2.2 billion in 2009 to more than $4 billion in 2010, while the private sector set a target of investing more than 4 trillion won this year, up from 3.2 trillion won in 2009.
The photovoltaic power industry has a value chain ranging from polysilicon, a key component for producing renewable energy, to module production and system business (power generation). Major players of the industry include Hyundai Heavy Industries, OCI, S-Energy and KPE.
Such shipbuilding and heavy industry players as Hyundai Heavy Industries, Samsung Heavy Industries and Doosan Heavy Industries and Construction are aggressively making investments in the wind power field. The Korean wind power industry has already completed the commercialization of 750kW-class wind power plants; has finished the development of a 1.5MW-class one and acquired its patents; and is now in the verification and experiment phase on the commercialization of 2MW- and 3MW-class ones.
The commercialization of the technology developed for household fuel cells is under way, and fuel cells for transportation are monitored for improving performance. Now, 210 household fuel cell units and 34 fuel cell passenger cars and buses are in use for a monitoring process. The second phase verification project for commercializing transportation fuel cells is to be launched for improving performance and building infrastructure for gas station with the goal of releasing pilot models by 2012. The project will cost 25.4 billion won, including 8.2 billion won in government support. Major players of the fuel cell industry include Hyundai Motor, POSCO Power, Doosan Heavy Industries and Doosan Heavy Industries and Construction.
The third national renewable energy master plan, established in December 1998, calls for boosting Korea’s proportion of renewable energy from 2.43 percent in 2008 to 11.0 percent in 2030.
The government plans to nurture the renewable energy industry as a future growth engine industry by making the most of the world-class semiconductor, display and shipbuilding infrastructure. nw

Kim Jung-kwan, deputy minister for energy resources at the Ministry of Knowledge Economy.

Kim Jung-kwan, deputy minister for energy resources at the Ministry of Knowledge Economy, holds an interview with NewsWorld Staff, including NewsWorld Publisher and President Elizabeth M. Oh.