Eastern European Countries Active in SMR Introduction
The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com. -- Ed.
Nuclear power returns
During the oil crises of the 1970s, NPPs started to be recognized as a way to resolve both high energy costs and security issues. But, following both the Three Mile Island accident in the US in 1979 and the Chernobyl disaster in Ukraine in 1986, construction of new NPPs sharply declined in the US and Europe. But, given the emergence of a new Cold War geopolitical landscape and stiffer costs for raw materials in the 2020s, the number of NPPs is expected to rise again around the world, centering upon Eastern Europe.
Doosan Enerbilility and Hyundai E&C
Since the 2000s, China and Russia have gained stronger presences in the global nuclear power market, whereas the involvement of both the US and France has reduced. Amid this change, value chains have become increasingly complex. Having built a track record manufacturing key equipment for Korea’s APR1400 and for the US’s AP1000, Doosan Enerbilility is now aiming to provide key components of SMRs and advanced module reactors (AMRs) for NuScale and X-Energy. It is also expected to build large-sized NPPs via its strategic partnership with US-based Westinghouse.
Korea boasts competitiveness in exporting NPPs, as well as weapons
Media reports say that Korea was able to ink a deal to export weapons to Poland, thanks to: 1) price value; 2) prompt delivery; and 3) a variety of support schemes. While Korea’s nuclear reactors work as well as US and French reactors, they boast a competitive edge in terms of price. Also of positive note, Korea completed NPP construction for the UAE as scheduled, and the Korean administration plans to strengthen financial support for NPP exports.
Eastern European countries active in SMR introduction
We forecast that SMRs will emerge as a new power generation source, along with renewable energy, helping to drive global carbon-neutral initiatives. Light water SMRs (developed by NuScale) should enjoy the first-mover advantage in the global market. Meanwhile, non-light water SMRs under development by TerraPower and X-Energy are to be put into commercial operation from the 2030s. We note that Eastern European countries in particular are being active in introducing SMRs.
Commodity prices to remain lofty during wintertime
Since the breakout of the Russia-Ukraine war, EU member countries have been struggling to reduce their dependence upon Russian natural gas. But, despite well accumulated natural gas inventories, Europe’s energy problem is likely to persist during this coming winter, affected by both operation disruptions at France’s NPPs and reduced hydro generation amid abnormal weather conditions this past summer. Given such, natural gas and coal prices should remain lofty for now.