Resources Security' A Global Concern

Government aims to raise its own petroleum and gas development rate to 13 percent in 2011, 18 percent in 2012 and 30 percent in 2019

Kim Jung-gwan, deputy minister of the Office
of Energy and Resources at the Ministry
of Knowledge Economy (MKE)

"Korea National Oil CorporationOs bid to grow and become a global concern has gained ground as the state-run corporation has seen a 3.5-fold jump in production, a doubling in the securing of deposits and a 5.2-fold hike in the number of operation crews compared to 2007," said Kim Jung-gwan, deputy minister of the Office of Energy and Resources at the Ministry of Knowledge Economy (MKE).
Starting with its acquisition of the Ankor production mine in the United States in January 2008, KNOC has succeeded in a series of M&A bids - taking over Savia Peru and Harvest in 2009 and Dana in 2010. KNOC has successfully secured a foothold for its entry into North America through Ankor and Harvest, into South America through Savia Peru, into Central Asia through Sumbe and into the North Sea and Africa through Dana, he said. The following are excerpts of an interview between NewsWorld and the MKE's deputy minister, who spoke about policies to nourish nuclear power construction and smart grid industries as well as to explore resources in Korea and abroad.

Question: Will you tell our readers about the significance of the government's proclaiming of the first Atomic Energy Day and the expected effects?
Answer: Atomic Energy Day, which marked its first anniversary last Dec. 27, has become the sole and biggest legal anniversary day in the nuclear power industry, being organized by the Ministry of Knowledge Economy (MKE) and the Ministry of Education, Science and Technology (MEST), in celebration of Korea's first nuclear power export deal with the United Arab Emirates.
The government's designation of Atomic Energy Day as its 41st anniversary day was designed not only to boost the morale of those in the Korean nuclear power industry and enhance public awareness toward atomic energy. It is also expected to serve as an opportunity to collect capabilities related to atomic energy uses, including the promotion of the domestic nuclear power industry, overseas exporting and the construction and operation of nuclear power units.

Q: Will you explain the current status and prospects of the Korean atomic energy industry?
A: The government is seeking to dramatically raise atomic power's portion in generating electricity in order to cope with such issues as greenhouse gas emissions reductions. The first national energy master plan, established in August 2008, calls for increasing the power generation share of atomic energy from 26 percent in 2006 to 41 percent in 2030. A look into CO2 emissions by energy source, released by the International Atomic Energy Agency (IAEA), put nuclear power at 10 grams of CO2 equivalent per kilowatt hour of generation (gCO2eq/kWh), followed by wind power (14), photovoltaic power (57) and coal (991).
On top of the existing 20 nuclear power units now in operation, an additional 20 units will be built by 2030, including eight now under construction. The current 20 units have a capacity of 17.72 million kW, which breaks down to four units at the Kori Nuclear Power Complex with a combined capacity of 3.14 million kW; six units at the Yongkwang Nuclear Power Complex with a capacity of 5.9 million kW; six units at the Ulchin Nuclear Power Complex with a capacity of 5.9 million kW; and four units at the Wolsung Nuclear Power Complex with a capacity of 2.78 million kW. The eight units now under construction are four units at Shin Kori with a combined capacity of 4.8 million kW, two units at Shin Wolsung with a capacity of 2 million kW and two units at Shin Ulchin with a capacity of 2.8 million kW.
Korea landed a project to build four 1.4 million kW-class APR1400 units for the United Arab Emirates last December. The Advanced Power Reactor (APR) 1400, developed with KoreaOs own technology as a pressurized light-water reactor, is now being constructed for Shin Kori Nuclear Units 3 & 4 and Shin Ulchin Nuclear Units 1 & 2.
The UAE project, which begins with a site survey this year, calls for completing the construction of the first unit in 2017 and dedicating one every year until 2020.
The nation is striving to aggressively make inroads into the foreign nuclear power construction markets with Korean-style reactor models by making the most of the current upsurge in the construction of global nuclear power units. The World Nuclear Association (WNA) predicted last October that a total of 430 units would be constructed by 2030 across the world. Last February, the United States announced a plan to resume the construction of nuclear power units with an $8 billion guarantee. The government established strategies on Jan. 13, 2010 to nourish the domestic nuclear power construction industry into an exporting mainstay with the goal of securing a 20 percent share in the global nuclear power plant construction market.

Q: Will you elaborate on the current status of the development of nuclear power technologies?
A: The nuclear power generation technology development program, dubbed ONu-Tech 2012,O calls for localizing untapped core technologies of the APR1400 model being employed by Shin Kori Units 3 & 4 and the UAE project - the man-machine interface system (MMIS), the reactor coolant pump and the core design cord - and advancing the technology development of the new Korean-type model, APR+, to 2012.
The government is drawing up the mid- and long-term national nuclear technology development roadmap, dubbed ONu-Tech 2030,O designed to push ahead with the development of Korean-type premier power plants with improved safety and efficiency and an international competitive edge.

Q: Will you explain the plan to build nuclear power units in the UAE?
A: The UAE project is under way as planned following the signing of a contract between Korea Electric Power Corp. and the Emirates Nuclear Energy Corp. During 2010, basic work of the project, including the opening of the field construction office, a site survey and the signing of contracts between KEPCO and its cooperative companies progressed smooth without a hitch. The project calls for the construction of seawalls at the site and maritime works as well as the production of major nuclear power apparatus and equipment during this year. The government plans to provide active support to make the UAE project a success by conducting periodic examinations of the progress through enhanced ties with the UAE government.

Q: Will you introduce the government's strategies to enhance the utilization of nuclear power as a green energy source?
A: The government is making seamless preparations for expanding nuclear power's share in electricity generation to back up low-carbon, green growth and ensure a stable supply of electricity.
The first national energy master plan, established in August 2008, calls for raising nuclear powerOs share from 24 percent in 2008 to 41 percent in 2030 in terms of capacity, and from 35 percent to 59 percent during the same period in terms of power generation. The construction of roughly 11 nuclear power units on top of the eight now under construction is planned.
It has already gotten down to selecting a new nuclear power construction site and the construction of a radwaste disposal site is already under way.

Q: Will you tell us about the current status of the so-called global nuclear renaissance?
A: An era of global nuclear renaissance has been ushered in as countries are on the same wavelength on the necessity of nuclear power to address such issues as greenhouse gas emissions reductions and easing the dependence on fossil fuels.
The World Nuclear Association forecast last September that about 430 nuclear power units will be constructed by 2030, so the market is estimated at 1,200 trillion won. In particular, such countries as China, Russia, India and the United States plan large-scale nuclear power construction projects. The U.S. Department of Energy forecast in 2007 that 500 to 1,000 units with a small-to-medium capacity would be built along with the creation of diverse markets, including the operation and maintenance of outdated nuclear power units.

Q: Will you specify the progress and future plans of the Jeju Smart Grid Test-bed Project?
A: The year 2010 was a year for building the foundation for putting the smart grid on the right track. The government submitted to the parliament a measure on the act on the construction of intelligent power grids and facilitating utilization, designed to stabilize the construction of the smart grid and nourish convergence industries. The Jeju Smart Grid Test-bed Project is running smoothly with the construction of such infrastructure as 600 smart meters, 73 electric car chargers and a test-bed operation center.
The first Smart Grid Week took place last November to share global technological experiments and information with Korea playing a leading role in inaugurating the International Smart Grid Action Network (ISGAN).
During this year, the government is striving to yield tangible results by developing smart grid business models and leading international discussions on the smart grid. It plans to complete the legislation of the proposed act on the construction of intelligent power grids and facilitating utilization and related degrees, including the ones on the registration of intelligent smart grid businesses and guidelines on the protection of information. The infrastructure buildup of the smart grid test-bed is to be finished in the first half and the development of new electricity services will be pushed. Korea plans to make flat-out efforts to establish itself as a smart grid trendsetter by serving as the secretariat of the IGSAN and implementing collaboration projects with the state of Illinois in the United States.

Q: Will you tell us about the current status of overseas resources exploration and KoreaOs resources development goals?
A: As demonstrated by conflicts over China's exporting rare earth metals to Japan, securing a stable supply of energy and resources has emerged as one of the most significant factors determining national competitiveness of the future. Inter-ministry support, led by the rapid rise of financing since the inauguration of Lee Myung-bak, has paid off: KoreaOs own petroleum and gas development has surpassed a record high of 10 percent in 2010, a surge from 4.2 percent in 2007, and its own development rate for top six strategic resources surged from 18.5 percent in 2007 to 27 percent in 2010. The government funneled 2.4 trillion won into its resources development budget during the period between 2003 and 2007, 4.3 trillion won during the period between 2008 and 2010 and set aside 1.2 trillion won for 2011.
The government plans to raise its own petroleum and gas development rate to 13 percent in 2011 by helping it gain momentum. The government is aiming for a 18 percent in 2012 and 30 percent in 2019 in order to make strides towards a stable supply of energy resources.
The ministry also plans to designate as new strategic resources such metals as rare-earth metals and lithium, the demand for which is likely to explode due to their widespread uses in IT and green industries and has a goal of importing 10 % of the needed resources on its own during this year. To this end, the nation plans to expand strategic partnerships with resources-rich countries in Africa and Central and South America while accelerating efforts to tap domestic mines.

Q: Will you comment on the current status and future plans of the Korea National Oil Corporation's (KNOC) pursuit of M&As of global petroleum exploration and development companies?
A: Starting with its acquisition of the Ankor production mine in the United States in January 2008, KNOC has succeeded in a series of M&A bids, taking over Savia-Peru and Harvest in 2009 and Dana in 2010.
These have enabled KNOC to produce 130,000 barrels per day and secure 720 million barrels of reserves and hire 4,700 local employees. KNOCOs bid to grow and become a global concern has gained ground as the state-run corporation has seen a 3.5-fold jump in production, a doubling in deposits and a 5.2-fold hike in terms of the number of operation crews, compared to 2007. KNOC has successfully secured a foothold for its entry into North America through Ankor and Harvest, into South America through Savia Peru, into Central Asia through Sumbe and into the North Sea and Africa through Dana.
KNOC will step on the gas to improve its corporate value by taking into account regional characteristics and the composition of portfolios of M&A target companies. The government plans to accelerate its bid to make KNOC bigger by 2012 in order to attain its own development goals and lay the foundation for its own sustainable growth after that year.nw