Korea to reboot nuclear power sector with orders, aid

South Korea plans to rebuild the nuclear power plant industry hard hit by the previous government’s nuclear energy phasing-out policy by placing new orders and providing financial aid to the sector.

“The nuclear power plant industry currently lies in ruins, hit by a bomb called the phase-out of nuclear power, and the sector is on the verge of annihilation,” President Yoon Suk-yeol said on Wednesday in a meeting with industry contractors at the headquarters of Doosan Enerbility Co., a major power plant builder. 

“The sector is in a situation where no one can be sure of its survival even with overwhelming support.”

Yoon criticized the previous President Moon Jae-in administration’s policy on the industry, saying “had we not been foolish over the past five years and further reinforced the nuclear power ecosystem, we probably would not have any competitors now."

BACK TO NUCLEAR POWER PLANTS

The Ministry of Trade, Industry and Energy, as well as the Ministry of SMEs and Startups unveiled measures, the first of the support pledged from the Yoon government, to aid the nuclear power plant industry. The move indicated the administration is accelerating steps to rescind its predecessor’s policy and foster the sector. 

The country plans to place new orders of more than 1 trillion won ($767 million) in nuclear projects by 2025, including 92.5 billion won this year.

The government is also set to resume construction of two nuclear power plants, which were suspended by the prior administration, in the near term after checking the power supply and demand plan and other policies this year.

The Yoon administration, which had planned to restart construction of the Shin-Hanul No. 3 and No. 4 nuclear reactors in 2025, decided to bring the work forward to start as soon as possible at the request of power plant contractors, which said they cannot stay afloat until then.

The country aims to enhance its nuclear power plant export capabilities. Senior government officials will try to win deals from other nations such as the Czech Republic and Poland that are expected to place nuclear power plant orders in the near term. South Korea is poised to expand export items into equipment, management and services.

“The nuclear power plant ecosystem can revive if the government succeeds in exporting with diplomacy,” said Korean Nuclear Society President Jerng Dong-wook.

Before taking office, Yoon pledged to seek to export 10 nuclear power plants by 2030.

The government plans to launch a unit in July organized by both the public and private sectors to promote nuclear power plant exports and discuss various packages including defense, construction, infrastructure and financial deals. The energy minister will lead the unit, in which other ministries, state-run companies in the power and financial sectors, as well as private experts will participate.

FINANCIAL AID

The country has announced financial aid plans for the sector. The government is set to provide liquidity of 380 billion won through policy funds for small- and medium-sized enterprises, and other methods this year.

To improve the industry’s competitiveness, the authorities are poised to invest 670 billion won in the development of the sector’s technology this year and 3 trillion won more by 2025.

The country decided to spend 399.2 billion won by 2028 on the development and commercialization of homegrown small modular reactors (SMR).

At the same time, the nation will focus on research and development related to demand in overseas markets to domestically develop core parts and support exports of smaller contractors. The government, led by the energy ministry, is scheduled to analyze the industry’s supply chain by December. It will manage key product items to prevent disruptions in the nuclear fuel, raw materials and equipment while increasing investment in raw materials, components and facilities.


Write to Ji-Hoon Lee and In-Yeop Kim at lizi@hankyung.com
Jongwoo Cheon edited this article.