Inside the U. S. nuclear energy industry, there is a high level of respect and admiration – along with a barely suppressed tinge of jealousy – for the way that the Republic of Korea (aka South Korea) has steadily developed its world class nuclear power plant manufacturing and construction industry.
Starting from zero operating plants in the mid 1970s, South Korea now has 28 units that reliably supply one third of its electricity. Current plans call for a continued building program to increase that capacity by 70% to 38 units by 2029. It has also won oversees contracts with the most visible one being a $20 billion dollar construction contract for four APR-1400 reactors. Successful progress on that construction project was a factor in winning a contract to operate the facilities, valued at nearly $50 billion over a 60 year period.
That shining light for the nuclear industry is being threatened by an upcoming election.
South Korea Is A Unique Example Of Positive Learning In Nuclear
With the consistent backing of the government and a highly organized network of suppliers providing materials and components to the state-owned monopoly utility company responsible for building the plants, the South Korean nuclear enterprise has achieved remarkable success. Unlike almost every other country, it has steadily increased its capability, trained new workers, refined manufacturing techniques, learned how to schedule complex projects – even in distant lands like the United Arab Emirates – and managed to deliver final products that work on a schedule and within a budget.
According to a recent study led by Jessica Lovering, the Director of Energy at the Breakthrough Institute, the South Korean method of steady learning and improvement worked.
Overall, from the first reactor in Korea in 1971, costs fell by 50%, or an annual rate of decline of 2% for the entire Korean nuclear construction history. This is in sharp contrast to every other country for which we present cost data.
The latest experience in South Korea, with its standardized design and stable regulatory regime, suggests the possibility of learning-by-doing in nuclear power.
That success is not surprising to anyone who understands the importance of practice, steady effort, predictable investments and growing sophistication in an environment where the government and the public are generally supportive instead of antagonistic.
All has not been rosy in recent years; there have been several parts and component related scandals that have caused significant periods of forced outages in order to inspect plants and, in some cases, replace counterfeit materials or components. There has also been a widely publicized incident of computer hacking involving a company that is part of the South Korean nuclear power enterprise.
From the other side of the world, though, it appears that most of those issues have been addressed and recovery is well underway.
Worrying Warning Signs
Since the great Northeast Japan earthquake and tsunami on March 11, 2011, there has been an increasingly vocal movement that resisting the continued development of nuclear power plants and is even agitating for efforts to close and destroy plants that are already completed and not even close to the natural end of their operating lives.
One of the more visible and politically important members of the movement seems to be Park Won-soon, the mayor of Seoul, South Korea’s largest city. In a piece titled Solar Seoul Shows How Eco-Friendly Cities Can Work, Park clearly laid out his thoughts on energy supplies.
In 2012 the city of Seoul launched a citizen-initiated project, “One Less Nuclear Power Plant.” The project was part of our effort to join the anti-nuclear movement spreading worldwide, to overcome the power crisis, and to respond to climate change. The project first aimed to reduce the city’s electricity consumption by an amount equivalent to the output of one nuclear plant through energy conservation and renewable energy production. Thanks to the enthusiastic support it had received from citizens during the past two years, the project has reached its 2 million TOE target 6 months ahead of schedule.
Impeached President Being Replaced
More worryingly, Park Geun-hye, formerly the President of South Korea, was impeached following revelations that she had abused her political office. In cooperation with a friend and a former aide, she pressed large enterprises to send money to foundations set up to support her political objectives.
Park’s impeachment was upheld by the Supreme Court in early March, starting a 60 day clock that will result in a new election before mid May.
Moon Jae-in, Leader Of Largest Party
Moon Jae-in, a leading candidate from the leftist Democratic Party, has promised to take action to reduce coal consumption, phase out the nuclear industry by 2060 and replace both with additional imports of natural gas, both in the form of LNG and potentially via a pipeline through North Korea.
Moon has also pledged to pave the way for achieving ‘nuclear zero’ by around 2060, to address growing public fears about safety, particularly in the wake of the country’s biggest earthquake in September last year, which forced four nuclear reactors to close for three months.
“I will make South Korea build no more nuclear reactors and close down aged nuclear reactors when their lifespan expire,” Moon said. “Through this, South Korea can arrive at nuclear zero in 2060, and until then, we can develop alternative sources,” he said.
The best alternative to coal and nuclear, Moon said, is renewable sources, but it would take a long time for them to meet electricity demand. “So, South Korea needs to consider purchasing natural gas from neighboring Russia by building a pipeline,” he said. South Korea’s state-run Korea Gas Corp. signed a preliminary agreement with Russia’s Gazprom in 2008 to buy 10 Bcm/year of Russian gas for a 30-year period, beginning 2015.
Rise Of Ahn Cheol-soo, Founder Of The People’s Party
During the past several weeks, as tensions have dramatically increased on the Korean Peninsula, Ahn Cheol-soo, a relative political newcomer has been rising rapidly in the polls. Many of the conservatives that worry about Moon’s interest in moving closer to North Korea are telling poll takers that they favor Mr. Ahn, even though his party only holds 40 seats out of the 300 seats in Parliament.
He’s a former medical doctor, a successful software entrepreneur, an academic dean, a graduate of Pennsylvania’s Wharton School of Business and a populist. He is both a friend of the United States and an reformer who wants to address rising income inequality and restructure the chebol, the large, integrated conglomerates that dominate the South Korean export-based economy.
His stance on nuclear energy is less specific than Mr. Moon’s, but he has indicated in the past that he is skeptical about the plan to build a significant number of new nuclear plants in South Korea and would favor increasing dependence on imported LNG.
With my long distance perspective, it appears that Mr. Ahn’s skepticism on nuclear energy may be related to its status as being state-owned and controlled by the same kind of people that run the chebol. Since he is not a career politician, Ahn might be more interested in a sensible discussion about the benefits of nuclear energy than his more ideologically driven opponent.
What Happens If South Korean Leaders Slow Domestic Nuclear Energy?
The scandal that led to the ouster of Park Geun-hye has resulted in increasing opposition to the status quo of a South Korea whose economy is led by enormous, export oriented manufacturing enterprises. If the reaction leads to the election of an avowed opponent to continued nuclear energy expansion, he might single-handedly reverse the progress that the Korean Electric Power Company (KEPCO) has achieved in learning how to build large nuclear plants.
If the country stops building reactors at home, it will have substantially more difficulty maintaining its ability to successfully export the technology.
If a shift away from nuclear energy production is implemented, it will result in a South Korea that is increasingly dependent on a natural gas supply from Russia through North Korea and on imports of liquified gas. That situation would have rippling effects through both the energy industry and world geopolitics.
It almost goes without saying that there are plenty of suppliers in the natural gas industry that would love to profit from increased sales to South Korea. The increased demand will help keep world prices high and profitable while every commodity business enjoys situations that increase their sales volume.
There are also plenty of interests in Russia, North Korea and China that would like build more links binding South Korea to their fuel exports, making the government less willing and able to cooperate with the United States.
Note: A version of the above was first published on Forbes.com. It is republished here with permission.