For Whom The Bell Tolls?
According to a report by Reuters on September 14, Saudi Arabia will begin to place an order to build two 2.8GW nuclear power plants totaling 2.8GW of capacity next month. The kingdom will break ground for the two nuclear power plants next year and is considering building nuclear plants totaling 17.6GW of capacity by 2032 in the long term.
Saudi Arabia was expected to send a request for information (RFI) to major nuclear power plant construction leaders such as Korea, France, China, Russia and Japan next month, Reuters said. An RFI is a procedure to evaluate companies’ ability to build nuclear power plants such as technological power and financial status before selecting builders.
The nuclear industry is forecasting that KEPCO, which is currently carrying out activities to export nuclear power plants in Britain, Czech Republic and Vietnam, will also take part in the bid for the Saudi nuclear power plant project. The Korean government has repeatedly said that it will actively support the export of nuclear power plants for national interests, but there is also concern in the nuclear power generation industry that the Korean government’s nuclear phase-out policy may stifle efforts to land nuclear power plant orders as they have to go through fierce competition among nations. Nuclear power plant construction is risky business that requires investment of trillions of Korean won for a long time so governments’ supports really matter.
When Korea won an order to build four nuclear power plants from the United Arab Emirates (UAE) in 2009, the Korean government including President Lee Myung-bak actively conducted economic diplomacy such as promising various support to the UAE government.
It is also pointed out as a problem that as Korean nuclear power plant equipment manufacturers' domestic sales decline due to the nuclear phase-out policy, their remaining power to invest in new technology development lessens.
The Ministry of Trade, Industry and Energy explained that Saudi Arabia had not yet announced its official ordering schedule, saying that the ministry was continuously monitoring overseas nuclear power plant export projects and making contacts. "The government's policy is to actively support exports as a way to ramp up national interests by examining profitability and risk," the ministry said in a press release.
Baek Woon-kyu, minister of trade, industry and energy, also met members of the labor union of the Korea Hydro & Nuclear Power on September 12 in Gyeongju. "I believe that nuclear power plant industry has big growth potential as an export industry thanks to its eco-friendly feature. I will spare no support if risk management is good," minister Baek said in the meeting.
How to Keep Even the Existing Contracts?
Under the circumstances, the Czech government, which is planning to build nuclear power plants next year, expressed its concerns over component supply to Korea Hydro & Nuclear Power on September 21. As a result, South Korean nuclear power plant builders’ business in Saudi Arabia and Britain is facing mounting uncertainties as well.
“The South Korean government is planning not to build the fifth and sixth units of the Singori Nuclear Power Plant based on its nuclear-free policy,” said an industry source, adding, “This can result in the lack of work to do within a couple of years on the part of South Korean nuclear power station builders and this is the very reason why the Czech government is hesitating to buy atomic power stations from South Korea.”
A total of four atomic power stations are expected to be built in the Czech Republic next year. Each of the plants that are expected to be housed in Dukovany and Temelin is likely to have a power generation capacity of at least 1,000 MW. The total cost of the projects is estimated at 30 trillion won.
The South Korean government held a joint committee meeting with the Czech government in 2015 to discuss joint business in third countries. More recently, the South Korean government held a nuclear industry forum in the Czech Republic in April this year. The two countries’ close cooperation, however, has come to a halt since the South Korean government announced its policy to focus on non-nuclear power generation.
The UAE is expressing the same concerns, too. South Korean companies won contracts for new nuclear power plants in the country in 2009 and the contracts are worth a total of no less than 22 trillion won (US$19 billion). It is Russia and China that are expected to benefit from the situation for a while.
More Chances for China
In the meantime, China revealed the current status of high-temperature gas-cooled reactor (HTGR) development, which is a next-generation nuclear energy technology, at the International Atomic Energy Agency (IAEA) General Conference in Vienna, Austria, on September 19. A HTGR uses helium as coolant, unlike conventional nuclear reactors using water. It is considered a typical future nuclear power technology.
During the presentation, China’s State Nuclear Power Technology Corporation (SNPTC), a joint venture of China Nuclear Engineering and Construction Group and Tsinghua University, said, “After five years of development, we have completed the HTGR installment in Shandong. We will operate a test run by the end of April next year for commercial operation.” South Korea has also been carrying out research and development of HTGR from 2003 but there is little progress.
Accordingly, some industry sources say that China has started outperforming South Korea in some nuclear energy technology sectors. Based on its enormous capital power and expertise in the state’s nuclear power plant management, China is rapidly dominating the global nuclear energy market and has already surpassed South Korea in terms of quantitative competition. As the South Korean government has vowed to phase out the country's dependence on nuclear power, there are concerns that the country can lag behind China in terms of qualitative competition as well.
A HTGR is considered a typical next-generation reactor in the global nuclear power industry. Existing nuclear power plants generate electricity by boiling water with heat caused by nuclear fission to make steam to run a turbine. China’s latest HTGR works in exactly same way: making use of heat to generate electricity. However, it can rapidly raise the temperature to the level to generate steam because it applies heat to helium, instead of water. In short, it has better efficiency. Moreover, the temperature of helium can be increased to 750 to 950 degrees Celsius, which is two to three times higher than water. The gas can be supplied to companies which need high-temperature heat such as oil refining and petrochemical plants.
The generation of nuclear reactors can be divided based on safety and economic feasibility. The first generation of nuclear reactors were developed in the 1950s and 1960s for laboratory experiment. The second generation of nuclear reactors were commercial reactors in the 1970s and 1990s. The third generation of reactors improved the safety due to growing concerns over nuclear power plants after Chernobyl accident in Russia and Three Mile Island accident in the U.S. The fourth generation of nuclear reactors increased both safety and efficiency. China’s HTGR is classified as the fourth generation of nuclear reactors. South Korea is still in the third generation level of reactors. China is also accelerating the development of sodium-cooled fast reactor (SFR), which is another fourth-generation nuclear energy. The SFR uses sodium as coolant and it is safe even when it loses power as sodium has a higher cooling effect than water.
China aims to operate 110 reactors and become the leading nuclear power company in the world by 2030. After exporting its self-developed nuclear reactors to Pakistan in 2013 for the first time, China has been building or completed 10 nuclear reactors in Argentina and Rumania. South Korea, however, has failed to win any nuclear deal for eight years since it exported four Korean-type reactors to the United Arab Emirates in 2009.
Experts say that intensive investment has made China become a leader in the global nuclear power market. According to nuclear power industry sources, 1,000 highly educated experts in China are working on the HTGR development. However, only 50 experts are developing the technology in South Korea. The budget for the study is also shrinking every year. An official from the nuclear power industry said, “The budget for SFR development is also expected to decrease as the new government has pledged to phase out the country's dependence on nuclear power. It is highly likely to cause problems.” The HANARO, a multi-purpose research reactor which has stopped operation for three years, has also failed to start operation due to opposition of civic groups.
Professor Joo Han-gyu from Seoul National University said, “When the studies on new nuclear power technologies are discontinued due to the government’s nuclear- free policy, the nation’s hard-won competitiveness of nuclear power technologies will shrink. China can take the leadership in the global nuclear power market after surpassing South Korea in terms of a next-generation nuclear power technology.”