Utility
The author is an analyst of NH Investment & Securities. He can be reached at minjae.lee@nhqv.com -- Ed.
Korean President Yoon Suk-yeol’s visit to the US should serve as a catalyst to strengthen the two countries’ SMR partnership. Elsewhere, SMR developer Holtec has signed an SMR deal with Ukraine’s Energoatom. We believe that the deal indicates the direction of Eastern Europe’s energy policy.
EU energy market for third week of April
Over Apr 16~22, the EU’s power generation rose 1.7% w-w to 44.2TWh. Its power mix consisted of nuclear 23.0% (-2.9%p w-w), coal 11.9% (-0.2%p w-w), gas 11.8% (-0.1%p w-w), wind 15.5% (-5.1%p w-w), solar 9.4% (-0.2%p w-w), hydro 13.0% (+0.4%p w-w), and other 15.4% (+8.0%p w-w).
In the fifteenth week of 2023 (Apr 13~19), the EU’s natural gas imports decreased 18% y-y and 0.6% w-w. By region, North America, Africa, and the Middle East accounted for 37%, Norway 29%, Algeria 11%, the UK 10%, and Russia 8%. Natural gas inventory in the EU stood at 61.5bn m3.
Energy source prices for the week
As of Apr 24, energy source prices stood at: WTI US$78.7/bbl (-2.7% w-w), NewCastle US$190.0/ton (+0.9% w-w), Northeast Asia natural gas (Japan/Korea Marker) US$11.88/MMBtu (-7.6% w-w), European natural gas (Dutch TTF) US$12.93/MMBtu (-6.0% w-w), and US natural gas (Henry Hub) US$2.25/MMBtu (-4.8% w-w).
Korea-US SMR cooperation to strengthen
We forecast that Korea-US cooperation on SMRs will further strengthen during the South Korean President Yoon Suk-yeol’s state visit to the US. Backed by the extending of existing cooperative relations between Korean and US nuclear plays (eg, SK/KHNP-TerraPower, Hyundai E&C-Holtec, and Doosan Enerbility/Korea EXIM Bank-NuScale), joint efforts to improve the US’s SMR technological capabilities and Korea’s reactor manufacturing prowess should accelerate going forward.
On Apr 24, Ukraine’s Energoatom and the US’s Holtec sealed a contract on construction of the first SMR in Ukraine, with completion slated for Mar 2029. They also agreed on establishment of up to 20 SMR-160 units (Holtec’s SMR model) and the construction of reactor manufacturing facility in Ukraine. The Ukrainian government, Energoatom, and Holtec started negotiations on an SMR in 2017 and signed a preliminary contract in Feb 2018. Existing nuclear plants in the country have been installed with Russia’s VVER-1000 reactors. The Ukrainian government expects the deal to lay a foundation for its mid/long-term plan of replacing Russian reactors with western models.