Korea faces uphill battle in winning Saudi nuclear deal

By Yoon Ja-young

Korea is seeking cooperation with the United States and the United Arab Emirates to secure a nuclear power plant deal in Saudi Arabia. However, it is expected to face an uphill battle as the Middle Eastern kingdom included all five bidders in its shortlist; and the Moon Jae-in administration's shift from nuclear to renewable energy will work against Korea.

The Ministry of Trade, Industry and Energy held a strategic meeting for exporting nuclear reactors, Monday, with representatives from the Korea Electric Power Corp. (KEPCO), Korea Hydro & Nuclear Power (KHNP) and other nuclear-related businesses.

The Korean consortium led by KEPCO was included on Saudi Arabia's shortlist for that country's first nuclear project, along with four other bidders. The kingdom also selected the U.S., Russia, France and China as preferred bidders to build two nuclear power plants with a total generating capacity of 2.8 gigawatts by 2030. It is expected to select a winner next year.

While Saudi Arabia has maximized its leverage by including all bidders on the shortlist, the competition has become tougher for Korea.

“It is true that Saudi Arabia's decision was not fully satisfactory for us since there was the expectation that it would shortlist only three countries including Korea. Tougher competition is expected in the bidding,” Energy Minister Paik Un-gyu said at the meeting.

Korea has strength in technology as it is finishing building nuclear power plants in the United Arab Emirates in a $20 billion deal, which will soon begin commercial operation. This gives Korea a competitive edge as it has experience building such plants in the desert. As the current administration is seeking an energy transition from nuclear and coal-fired power to renewable and LNG-fueled energy, however, competitors can attack it as a weakness. China, meanwhile, has price competitiveness and France has a lot of overseas construction experience. The United States has reportedly suggested easing a nuclear agreement with Saudi Arabia, allowing it to enrich uranium. Russia will also enable Saudi Arabia to engage in uranium enrichment and the reprocessing of spent fuel.

Industry analysts thus estimate that those forming a more powerful consortium will win the bid in the end. Korea is seeking cooperation with the United States as well as the UAE. Korea's nuclear technology has its roots in the U.S. Korea also successfully won the UAE deal by cooperating with American companies.

Cooperation with the UAE will also help. Back in March, the two countries agreed to cooperate to advance into other countries seeking nuclear power plants.

Korea has also been cooperating with Saudi Arabia regarding its “Saudi Vision 2030,” or the country's economic development roadmap to lessen dependence on crude oil. Riyadh country also plans to increase its use of nuclear and renewable energy while decreasing that of oil.

The energy ministry also opened a nuclear export support center Monday to strengthen the bid.

“We will give full support so that our nuclear industry can make another leap forward overseas through the Saudi Arabia nuclear deal following the one in the UAE,” Paik said.