Korea goes ahead with UAE power plants

By Kim Tae-gyu

Exactly a year ago in 2009, a national consortium headed by the Korea Electric Power Corp. (KEPCO) made history by winning an $18.6 billion contract to build four nuclear power plants in the United Arab Emirates (UAE).

Currently, a total of 1,300 employees work on laying the grounds for the state-of-the-art facilities, which will be established in Braka, around 270 kilometers west of Abu Dhabi, over the next decade.

KEPCO said the Seoul-based utility will start full construction next year together with subcontractors including its subsidiaries, overseas outfits and local private constructors.

``We have carried out various tasks as planned over the past year to meet the target of setting up the first reactor midway through 2017. Three more will be completed by 2020,’’ a KEPCO official said.

``Next year, we will wrap up construction of the harbor, breakwaters and waterways. Plus, the villages will be finished in order to house thousands of workers there. They can accommodate up to 10,000 people.’’

Unprecedented size

The $18.6 billion contract marks the biggest-ever construction deal in the history of Asia’s No. 4 economy and the largest energy deal in the Middle East.

On a more positive note from the perspective of Korea, the size can be doubled if the Korean consortium takes charge of the operation of the nuclear plants after construction.

To win the attractive agreement, KEPCO defeated a pair of favored candidates _ France’s Areva and an alliance between General Electric of the United States and Japan’s Hitachi.

``The UAE gave good marks to the Korean consortium thanks to the country’s knowhow and knack in running nuclear power plants based on more than three decades of experience,’’ the KEPCO official said.

``On top of the technological edge, the price competitiveness appears to have won the hearts and minds of evaluators.’’

The Seoul administration introduced nuclear power in 1978 to meet the rising demand for electricity in time with the country’s fast economic growth, and currently operates a total of 20 commercial reactors. Eight more will be built by 2017.

As of 2008, the country boasted of a nuclear power capacity ratio of 93.3 percent to supply 40 percent of the country’s energy requirements. This surpasses 89.9 percent in the U.S., 76.1 percent in France and 59.2 percent in Japan, according to KEPCO.

It added that the unit price for Korea’s construction of a nuclear reactor in 2008 was the lowest at $2,400 per kilowatt while the amounts were $2,900 for France and $3,582 for the U.S.

Bright future

The UAE contract raised the profile of Korea as a major exporter of nuclear power plants comparable to France or the U.S. Such states as Turkey and Lithuania have asked Korea to participate in their nuclear facility plans.

On the back of the raised awareness, the Korean government hopes to preempt the global market whose size is expected to reach $1 trillion by 2030 with the ordering of more than 400 reactors.

The Ministry of Knowledge Economy is looking to win some 20 percent of the demand, or 80 overseas plants, by then to become the world’s No. 3 player, trailing only the U.S. and France.

``Over the decades to come, we will nurture exports as well as help our firms increase their capacity to carve out a fifth of the global market between 2020 and 2030,’’ Minister Choi Kyung-hwan said earlier this year.