Nuclear energy in the Republic of Korea is being threatened as a result of the May 9 presidential election of Moon Jae-in.
Since at least 2012, when he suffered a narrow election defeat, Moon has advocated a halt to nuclear plant construction, prohibiting license extensions and achieving a “nuclear zero” policy by 2060.
With the election behind him, Moon can expect support in the National Assembly from fellow members of the Democratic Party of Korea and from the People’s Party led by Ahn Cheol-soo, who also campaigned to lead the country with an energy platform similar to Moon’s.
While waiting for the newly elected government to announce its energy policy, Korea Hydro & Nuclear Power (KHNP) has directed Kepco Engineering & Construction to suspend detailed design work for two new APR1400 units at the Shin Hanul nuclear generating station.
Yesterday, BusinessKorea reported that KHNP had also suspended its land acquisition program for the proposed Cheonji Nuclear Power Plant after accumulating approximately 18% of the area needed, that there is pressure to stop building Kori units 5 & 6 after having completed 28% of their construction at a cost of at least 1.5 trillion won (1.3 billion USD), and that Kori 1 and Wolsong 1 will both be shut down within months when their soon-to-expire operating licenses end.
Successful and Growing Korean Nuclear Enterprise
Given the success of Korea’s nuclear industry, Moon’s position and its political popularity may be difficult to understand. Though it did not build its first plant until 1970, South Korea has 25 reactors supplying one third of its electricity.
Early plants were imported from Canada (AECL), France (Framatome) or the United States (Westinghouse), but newer ones are domestic refinements of Combustion Engineering’s System 80 plus design.
Until Moon’s election, Seoul planned to build a total of 38 reactors by 2029. It has also achieved overseas success; earlier this month, the United Arab Emirates (UAE) announced that a Korean-led consortium had completed the first of a four unit power plant at Baraka.
KEPCO is actively investigating the potential of replacing Westinghouse as the plant vendor for the Mooreside project in the United Kingdom.
With consistent government and public support since the early 1970s, the Korean nuclear industry has sustained a building program, increased its capability, trained new workers, refined manufacturing techniques, learned how to schedule complex projects and managed to deliver functional products on a schedule and within a budget, even in distant lands like the UAE.
According to a recent study led by Jessica Lovering, the director of energy at the Breakthrough Institute, the Korean experience proves positive earning curves can apply to nuclear plant construction.
“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,” Lovering’s April 2016 report said. “This is in sharp contrast to every other country for which we present cost data.”
Root Causes of Antinuclear Strength
The pattern of steady improvement suffered a serious setback in 2013 when it was discovered that about 2,000 out of a sample of more than 290,000 quality assurance documents were forged, covering up the installation of control and safety system cables that did not meet requirements.
Those poor quality cables had been installed in several recently completed nuclear plants. Replacing the cables cost tens of millions of dollars and required extended shutdowns often lasting several months.
In combination with reactions to the Fukushima event, the counterfeit cable scandal provided ammunition for an increasingly vocal antinuclear movement.
During the period when the affected reactors were shut down for repairs, Seoul met its electricity needs by burning more domestic coal and imported natural gas.
During 2013 and 2014, their consumption increased by an average of 0.5 billion cubic feet (BCF) per day, providing a measurable contribution to a seller’s market in LNG.
A report published by the U.S. Energy Information Agency last August noted the declining LNG market in South Korea, and concluded that the potential for demand growth was limited by government policies that favor coal and nuclear over natural gas.
History of Support for Gas
Coal burning has been blamed for contributing to an increase in fine particle pollution and a decrease in overall air quality. In 2016, South Korea operated about 50 coal burning power plants that produced 40% of its electrical power.
During the campaign Moon gave a group interview to an audience that included S&P Global Platts.
“We should reduce consumption of fossil fuels, coal in particular. Coal-fired power plants are accused of air pollution and fine dust emissions….I will make South Korea build no more nuclear reactors and close down aged nuclear reactors when their lifespans expire,” Moon said.
Moon stated that he would prefer to replace the electricity produced by coal and uranium with renewable sources. But he admitted that the process would take a long time.
He pointed out that South Korea has combined cycle gas turbine power plants that are only operating at a 40% capacity factor and suggested that could quickly be raised to 60% or more.
Moon entered national politics by serving as a close aide to President Roh Moo-hyun from 2003-2008.
During that period, there was a notable thaw in relations between the North and the South along with a warming of relations with Russia.
State-run Korea Gas Corp. signed a preliminary agreement with Gazprom in 2008 to buy 10 Bcm/year (slightly less than 1 BCF/ day) of Russian gas for a 30-year period, beginning in 2015.
That deal, on hold for the past eight years, is likely to be revived.
On Geopolitics and LNG
Shifting away from nuclear energy will make South Korea increasingly dependent on its neighbors. That situation would have rippling effects through both the energy industry and world geopolitics.
Russia, North Korea and China have interests in binding Seoul to their fuel exports, making the government less willing and able to cooperate with the U.S.
At the same time, numerous suppliers in the natural gas industry would profit by increasing LNG consumption in South Korea, a market into which additional capacity from Australia, Africa and the U.S. might be sold, helping to keep world LNG prices firm and profitable.
South Korea’s powerful shipbuilding industry is a leading supplier of LNG tankers and has already seen improvements in its order book in recent months. The country may become a key participant in the Asian Super Grid that has been proposed by Softbank CEO Son Masatoshi.
KEPCO and its supplier base will have to act rapidly to resist political actions designed to dismantle their carefully assembled nuclear plant construction and operating business.
One factor that could help them find allies is Moon’s plan to pay for his initiatives by increasing electricity tariffs for energy intensive businesses. That should be an unpopular move in a country with an export-driven manufacturing economy.
Note: A version of the above was first published in the May 12, 2017 edition of Fuel Cycle Week. It is republished here with permission.