SK, KHNP partner with TerraPower for SMR development

SK Inc., SK Innovation Co. are partnering with Korea Hydro & Nuclear Power Co. (KHNP) and TerraPower,  a US small modular reactor (SMR) design company, to pursue the next-generation SMR business.

According to an announcement made on Wednesday, Kim Jun, SK Innovation's Vice Chairman, Whang Ju-ho, Korea Hydro's President and Chris Levesque, TerraPower CEO, signed a "mutual cooperation agreement for the development and commercialization of next-generation nuclear technology" in Washington, D.C. on Monday.

Under this agreement, SK Inc., SK Innovation, and Korea Hydro will collaborate on the commercialization of "Natrium," a fourth-generation SMR based on the sodium-cooled fast reactor being developed by TerraPower.

TerraPower is building a 345-megawatt Natrium demonstration plant in Wyoming, with the goal of completion by 2030. The demo project, which can provide power to approximately 250,000 households, is supported by the US Department of Energy, which provided nearly $2 billion in funding for technology development and construction costs.

TerraPower is also conducting a feasibility study with PacifiCorp, an electric power subsidiary of Berkshire Hathaway Energy, to build up to five Natrium reactors by 2033.

SK Inc. and SK Innovation jointly invested $250 million in TerraPower in August last year, and this agreement will further enhance their collaboration in TerraPower's business development.

For Korea Hydro, the latest agreement provides a foothold to expand its presence in the North American next-generation SMR market. This agreement is also the first collaboration between Korea Hydro and a fourth-generation SMR company.

"The cooperation between SK Inc., Korea Hydro and TerraPower is significant in enhancing the US-Korea nuclear alliance at a time when the importance of energy security is increasing more than ever," said Kim Jun, Vice Chairman of SK Innovation. "This collaboration in the fourth-generation SMR market will be the driving force for the nuclear industry ecosystem."

The World Economic Forum forecasts that the SMR market will grow at an average annual rate of 22% until 2040. The UK's National Nuclear Laboratory predicts that the SMR market will reach a size of $478 billion by 2035.

Write to Eun-Ji Shim at summit@hankyung.com