Nuclear energy stocks surge again after Korea-US summit
The company logo of Doosan Group, owner of Doosan Heavy Industries & Construction, the country's No. 1 nuclear power plant builder / Korea Times file
By Yi Whan-woo
Shares of the country's nuclear power plant construction and operation companies are surging again in the wake of a joint commitment made by the leaders of Korea and the United States during their summit, May 21, to cooperate in exporting nuclear power plants.
The resurgence, following years of sluggishness due to President Moon Jae-in's nuclear phase-out policy, also comes after an announcement, June 3, that U.S. billionaires Bill Gates and Warren Buffett will build a $1 billion next-generation nuclear reactor in Wyoming.
The rally is likely to continue, as the Ministry of Trade, Industry and Energy is geared toward forming a consortium with state-run Korea Hydro & Nuclear Power (KHNP) to bid for a nuclear power plant project in the Czech Republic.
According to the Korea Exchange, Sunday, the combined stock values of Doosan Heavy Industries & Construction, the country's No. 1 nuclear power plant builder, and six other major market players increased by 5.85 trillion won to 21.7 trillion won ($19.4 billion) from May 21 to June 4.
The six were Hyundai Heavy Industries, Woori Technology, Bosung Powertec, Woojin Inc. and two subsidiaries of state-run Korea Electric Power Corporation (KEPCO). Those subsidiaries are KEPCO Plant Service and Engineering (KPS) and KEPCO Engineering & Construction (E&C).
Doosan, in particular, saw its share price surge 80.58 percent ― the highest among the seven ― for the past two weeks.
The market cap of the company accordingly rose by 4.73 trillion won to 10.64 trillion won during the same period, to become the 37th largest listed company, up from 59th.
“The joint commitment made by the leaders of Korea and the U.S. is apparently bringing hope for the Korean nuclear energy sector, although it remains uncertain how the nuclear phase-out policy will change its course,” KB Securities analyst Lee Eun-taek said.
During their summit in Washington, D.C., President Moon Jae-in and U.S. President Joe Biden said in their joint statement that the two allies are committed to “develop cooperation in overseas nuclear markets, including joint participation in nuclear power plant projects, while ensuring the highest standards of international nuclear safety, security, and nonproliferation are maintained.”
Speaking on condition of anonymity, a KEPCO official said the Korea-U.S. nuclear cooperation will be beneficial for KEPCO E&C, which is responsible for designing, engineering, and constructing nuclear and fossil-fuel power plants.
The official added that KEPCO E&C has been participating in bids for nuclear power plant construction projects in the Czech Republic, Poland and Saudi Arabia, among others.
The firm is also developing a small modular reactor (SMR), which Gates' company, TerraPower, and Buffett's power company, PacifiCorp, seek to build in Wyoming.
The project, called “Natrium,” will be built on the site of an old coal plant, with a goal of producing 500 megawatts of power during peak demand.
SMRs are considered to be more eco-friendly than traditional nuclear reactors, because they are carbon-free power sources, which President Moon has sought to put in place policy to foster their development as next-generation growth engines.