Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Questions arise over unclear phase-out policy
Wolsong nuclear power plant in Gyeongju, North Gyeongsang Province / Courtesy of Korea Hydro & Nuclear Power
By Kim Hyun-bin
By Kim Hyun-bin
Questions are rising over the President Moon Jae-in administration's policy to phase out nuclear power plants in Korea, which has estimated to have cost over 7 trillion won in lost sales over the last two years, according to a recent government sponsored report.
According to the report released by the Korea Atomic Industrial Forum, a drastic decline in sales occurred within the nuclear power industry soon after the Moon administration introduced the phase-out policy.
In 2017, when it was first introduced, sales plummeted 13 percent year-on-year, marking their first decline since 1995. In 2018 sales declined by a further 14 percent.
In addition, there has been significant reduction in power plant investment as well as personnel. In 2018, total investment was 7.89 trillion won, down 3.8 percent from the previous year, while the number of people working in the industry dropped 2 percent.
The Moon administration has ended the construction of six new nuclear power plants including the Shin Hanul Nuclear Power Plant Units 3 and 4, and decommissioned Wolsong-1 early, just last year.
The decommissioning of the Wolsong-1 reactor follows the shutdown of the Kori-1 plant in 2017.
Wolsong-1 started commercial operation in 1983, and was designed to be retired after 30 years. But the operation license was renewed in 2015 for another seven years. To extend its lifespan, the government invested 700 billion won of taxpayers' money which has ended up going to waste.
The decommissioning of the nuclear plants is in line with the Moon administration's policy to promote sustainable energy resources and reduce the country's dependence on nuclear power and fossil fuels.
One of the President's election pledges was to increase renewable energy's share of total energy use to 20 percent by 2030, up from the current 7 percent. The government also wants to retire 11 out of its 24 reactors by the end of that year.
“The nuclear phase-out policy is just wrong. In simple terms there are five harmful effects,” Seong Poong-hyun, a professor of nuclear power at KAIST said.
“It increases electricity costs, causes a threat to energy security, affects climate change, destroys our nuclear power industry and creates a safety hazard at the nuclear plants currently in operation,” he noted.
The bold move has put Doosan Heavy Industries & Construction into financial jeopardy.
Doosan Heavy's net losses deepened due to the administration's push to boost the supply of power from clean and renewable energy sources.
The company posted an accumulated net loss of 2.68 trillion won from 2014 through 2019, and it has also lost 10 trillion won due to the cancellation of scheduled nuclear and coal-fired plant projects.
Around 650 out of 6,700 employees opted to take early retirement from Doosan Heavy after the company offered this option for the first time in five years, as a means to cut costs amid dwindling orders.
Doosan Group is planning to sell off its key cash cow affiliate Doosan Solus as part of self-rescue efforts to save the flagship Doosan Heavy.
The group is reportedly seeking to sell its entire 61 percent stake for between 600 billion won to 800 billion won.
The Korea Electric Power Corp. (KEPCO) also recorded an operating loss of 1 trillion won, its largest since 2008, which many experts believe is directly correlated to the phase out of nuclear power plants.
Despite the losses, President Moon could speed up his efforts to get rid of the plants as the ruling Democratic Party of Korea won a super-majority of 180 seats in the National Assembly during the April 15 general election.
The main opposition United Future Party (UFP) has been strongly against the phase-out and continues to call on the Moon administration to reconsider its policy.
“The harmful consequences derived from this administration's nuclear phase-out policy has led to the destruction of the nuclear industry here as well as the loss of jobs,” Yoon Han-hong, a UFP lawmaker said. “We need to reconsider the policy before it is too late.”