BUSINESS

[Newsmaker] Korea hits setback in UK nuclear power plant project

By Shin Ji-hye

Some politicians, experts blame Seoul government’s anti-nuclear campaign

  • Published : Aug 1, 2018 - 17:19
  • Updated : Aug 1, 2018 - 17:27
On Wednesday the South Korean government scurried to calm escalating debate over the latest setback faced by the state-run Korea Electric Power Corporation in acquiring a nuclear power plant construction project in the UK.

It was revealed that Kepco lost its status as the preferred bidder to obtain Toshiba’s 100 percent stake in the NuGen nuclear power plant project last month, as the Japanese company felt burdened by prolonged negotiations and high operating cost, in order to open doors to alternative buyers.

Kepco, which beat out rivals in such countries as China to be selected as the preferred bidder in December, had initially planned to sign a takeover contract within the first half of this year.


“We will actively push for a negotiation to achieve mutual benefits of the UK’s stable supply of energy, Toshiba’s management stability and Korean nuclear industry’s jumping into overseas,” said Moon Shin-hak, chief of the energy ministry’s nuclear power plant industry division in a press briefing.

The project, valued at $19 billion, involves building nuclear power stations in Moorside Cumbria, northwest England, to produce electricity with 3.4 gigawatts of nuclear capacity by 2024.

As to why Toshiba dropped Kepco as the preferred bidder for the NuGen nuclear unit, the Korean government said, “Toshiba wants to sell off the consortium as early as possible.”

“But the recent British government’s decision to change profit models for the project has delayed it further, as the British government and Korea need to renegotiate on the profit model issue,” said a government official.
 
Paik Un-gyu (second from right), minister of trade, industry and energy, poses for photo with Greg Clark (second from left), British secretary of state for business, energy and industrial strategy, after agreeing to cooperate on nuclear power plants in November of 2017 in London. (Yonhap)

In June, the British government had changed the profit model for the NuGen project, prompting the need for renegotiation. Toshiba has been seeking to sell off the NuGen project as early as possible after suffering huge losses from its beleaguered US nuclear unit Westinghouse.

The Korean government maintained optimism on the purchase, with Moon saying the essence of the negotiations has not changed.

Despite the government’s efforts to downplay Toshiba’s decision, opposition politicians and some experts raised suspicions that the delay for Kepco may have been affected by the Korean government’s anti-nuclear campaign.

From the British perspective, it has to find an operator which can manage the nuclear power plant for the long-term, but an anti-nuclear Korea may not be suitable, according to industry watchers.

The nation’s main opposition Liberty Korea Party said Tuesday that Korea needs to re-examine its anti-nuclear campaign.

Rep. Yoon Young-seok, a party spokesman, said, “It is not easy for the nation which declared an anti-nuclear campaign to operate nuclear plants overseas that need decades of maintenance as well as to procure necessary parts.”

Lee Duk-hwan, a professor at Sogang University specializing in science communication, said, “If Kepco’s move to buy the NuGen project flounders, it will prove that the idea of both building nuclear power plants overseas and the nation’s anti-nuclear power plants may not be compatible.”

Both Kepco and the Energy Ministry shot down such claims, saying “Toshiba’s decision has nothing to do with the nation’s anti-nuclear campaign.” 

By Shin Ji-hye(shinjh@heraldcorp.com)



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