NK Project Helped KEPCO Win UAE Nuclear Bid
By Kim Hyun-cheol
Staff Reporter
A controversial inter-Korean nuclear development project, which wrapped up years ago, played a key role in helping the Korea Electric Power Corp. (KEPCO) win its first bid to build nuclear power plants overseas, a senior KEPCO official said.
"Some still might say the Korean Peninsula Energy Development Organization project was a failure, but it offered us priceless experience that helped us win the United Arab Emirates (UAE) bid," Byun Jun-yeon, KEPCO's executive vice president, told The Korea Times.
The KEDO project, launched in 1995, was aimed at constructing a light-water nuclear power plant in North Korea. However, no concrete results were apparent as the project broke down due to Pyongyang's intransigence and disputes among participants.
The one positive outcome was that KEPCO gained priceless experience, Byun said.
"The decade-long project taught us how to lead negotiations through talks with energy powerhouses such as the United States and Japan, and all the materials and documentations accumulated during the period helped us greatly this time," he said. "Before then, Korea had insufficient material written in English."
Luck was also on KEPCO's side this time, he said, as the UAE bid was an open tender, a rarity in the business. Because of their size, most nuclear plant projects have many factors to be considered other than just technical competitiveness, which causes the process to unfold in secret.
"Even though it was an open bid, KEPCO had only about a 5 percent chance of winning in the initial stages. And this didn't go over 10 percent even after we were among the final three bidders," Byun said.
Exporting Korean-made reactors has been Byun's ultimate goal for the last few years. He spent every single day last year "like a commander in a cut-throat war," while KEPCO's challenge was mostly regarded as too bold even at home.
"We were fully aware of our circumstances, so we tried to work harder than our rivals," he said.
"We always submitted all requested materials and documents earlier than the others, and tried to keep closer ties with UAE officials."
To Byun, the most thrilling moment of the bid came after it was selected as one of the three preferred bidders, after the state-run energy firm got U.S. power firm Westinghouse on its side.
"Earlier at the bidding presentation by 20 companies from around the world, Westinghouse suggested that KEPCO become a part of its consortium because the Korean company had little chance of winning," the executive said.
"In fact, no rival bidders took us seriously. Imagine what it was like for Westinghouse after the shortlist included us, and not them."
It took a lot of negotiations to persuade Westinghouse to join the KEPCO team.
"It might have been a severe blow to their ego, but we managed to convince them that in the big picture, the partnership was beneficial to both of us," Byun said.
The win wrote a new chapter in the nation's history of nuclear energy development.
The country became the sixth nuclear power plant exporter following the United States, France, Canada, Russia and Japan with the $20 million deal to construct four 1.4-gigawatt plants in Sila, a city on the west coast of the Middle Eastern country.
They are expected to supply half the country's energy demand by 2020. The first plant will be completed by May 2017.
Byun said the win was an epic moment in Korea's commercial nuclear history. When he started his career at KEPCO in 1977, there wasn't a single nuclear reactor in the country - the first plant in Gori, Busan, was launched a year later.
Several other countries, including the Philippines, Turkey and Brazil, started developing nuclear energy at the same time, but Korea has now reached an unmatchable level. It currently ranks sixth in nuclear energy production after the United States, France, Japan, Russia and Germany.
Nuclear energy accounts for more than 36 percent of the country's electric power supply, more than double the global average of 15.7 percent.
The average operation rate reached 93.3 percent for its 20 commercial reactors in 2008, according to the Ministry of Education, Science and Technology. The figure is also higher than the 91 percent and 76 percent of the United States and France, respectively, the world's top two nuclear energy users.
The UAE bid shows Korea is now a leading power in the industry, Byun said.
"Nuclear plants are more than just an energy supplier because they have more parts than airplanes, and are a high-profile product reflecting a country's overall technological and scientific level," he said.