Korea eyes nuclear energy partnership to offset trade risks at Trump summit

Kori Nuclear Power Plant in Busan, June 26 / Yonhap

Korea’s capability to build nuclear power plants has emerged as a key bargaining chip to offset trade risks with the United States, amid speculation that President Lee Jae Myung will likely float a nuclear energy partnership for the two countries at his summit with U.S. President Donald Trump in Washington on Monday.

The anticipation comes after Korea last month successfully persuaded the Trump administration to reduce its “reciprocal” tariffs on Korean imports from proposed 25 percent to 15 percent by promising Seoul's cooperation and investments to help revive the U.S. shipbuilding industry.

Korea Hydro & Nuclear Power CEO Whang Joo-ho on Saturday left for Washington to meet officials from the U.S. nuclear power industry on the occasion of the Lee-Trump summit. Nuclear power plant fuel and small modular reactors (SMR) technologies will be key discussion topics for Whang and his American counterparts in relay meetings, according to Korea Hydro & Nuclear Power (KHNP).

Along with Whang, Korea Electric Power Corp. (KEPCO) CEO Kim Dong-cheol headed to Washington to assist in talks with U.S. nuclear industry officials. KEPCO is Korea’s exclusive power distributor, which fully owns KHNP. Minister of Trade, Industry and Energy Kim Jung-kwan, who also left for Washington on Friday, said he is “looking at all possible ways” to hit agreements with the U.S. regarding nuclear energy.

The industry is watching closely to see whether KHNP can establish a joint venture with the American nuclear power company Westinghouse, which holds key nuclear technologies, to enter markets in the U.S., Europe and beyond.

According to KHNP, Whang will not meet officials from Westinghouse in this trip, but a bid for a joint venture for the global nuclear power market is in development. KHNP said, however, progress still remains at an early stage.

Korea Hydro & Nuclear Power (KHNP) CEO Whang Joo-ho, center, heads for a Trade, Industry, Energy, SMEs and Startups Committee meeting at the National Assembly in Seoul, Tuesday, for a questioning on details of a KHNP agreement with Westinghouse in January. Yonhap

The purported joint venture would be a new high point in the two countries' nuclear energy partnership.

Despite Trump’s plan to expand the nuclear energy capacity from the current 100 gigawatts (GW) to 400 GW by 2050, the U.S. nuclear power industry’s value chain has collapsed, with no new plants built since 2013. While Westinghouse holds the fundamental technologies used in Korean nuclear power plants, the company lacks construction capability, leaving Korean firms to take on core building processes.

Korea, which began commercial operation of its first nuclear power plant in 1978, has since expanded its infrastructure to 26 operating reactors that supply domestic electricity, with four more under construction. The country achieved a historic first with nuclear power exports to the United Arab Emirates in 2009 and is now in negotiations with Saudi Arabia, Poland, the Czech Republic, the United Kingdom and India for further export deals.

To boost the U.S. nuclear energy industry, Trump has signed executive orders that shortened the time needed to evaluate and approve new construction and operation licenses to 18 months. In recent meetings with Korea, U.S. officials reportedly asked Korean companies to play an active role in Washington's plan to reinvigorate its nuclear energy industry.

Despite the positive signs, a controversial deal signed between KHNP and Westinghouse in January is adding uncertainty to Korea-U.S. nuclear power cooperation.

The full details of the deal remain undisclosed, but the deal reportedly prohibits KHNP from bidding for new power plant projects in North America and Europe, in return for granting Korea access to a project in the Czech Republic.

The deal also forces KHNP to pay Westinghouse a technology usage fee and to purchase equipment from the American firm whenever KHNP exports a nuclear reactor, costing hundreds of millions of dollars.

Following the questionable deal, KHNP signed a final contract with the Czech Republic in June to build two nuclear reactors at Dukovany Nuclear Power Station.

The deal is now under political scrutiny amid suspicions that KHNP accepted unfavorable terms in order to allow the previous Yoon Suk Yeol administration to claim credit for the Czech contract.

With Washington signaling its hope for active Korean participation in its nuclear expansion plans, attention is now on whether the joint venture could also help dispel the controversy surrounding the January deal.

KHNP declined to confirm the deal's terms to The Korea Times on Sunday, citing confidentiality.