Before and after the lunar New Year holiday on Jan. 28, Korea Electric Power Corp. (KEPCO)’s nuclear power technology export team has been humming with optimism. Why? Chances are good that KEPCO will participate in the British government’s project to build the Moorside Nuclear Power Station in northwest of the United Kingdom.
It has been learned that a consortium of NuGen, responsible for the nuclear power project, has requested KEPCO’s participation in the project.
NuGen is to build three AP1000 nuclear reactors on a site near Sellafield, in Cumbria by 2025. The price tag is 15 billion pounds (about 21 trillion won).
NuGen, a UK joint venture between Toshiba and ENGIE, has been working on the project since it was awarded the project from the British government. But a variable has developed in the project as Toshiba, which has a 60 percent stake in NeGen, is considering withdrawing from the nuclear power business, which has suffered 7 trillion won in losses.
There is a high probability that Toshiba will give up on the British project. Now the British side is said to be considering KEPCO as a strong contender to replace Toshiba. If KEPCO’s participation in the British project is confirmed, it will be the second time Korea would land an overseas nuclear power project, and eight years after the nation won an order for a nuclear power project from the United Arab Emirates.
Since 2006, Toshiba has been a powerhouse in the global nuclear power market, along with GE Hitachi Nuclear Energy, Areva/EDF and Russia’s Rosatom. Toshiba’s acquisition of Westinghouse is not a boon to the Japanese company, however.
Toshiba’s orders for the construction of four nuclear power units in Georgia and South Carolina have been on hold for four years, incurring snowballing losses. To make matters worse, the AP1000, a third-generation nuclear reactor developed by Westinghouse, has required a longer construction period than expected, incurring additional costs, on top of those on stricter safety regulations. Toshiba also suffered huge losses in the course of acquiring Stone & Webster, an American nuclear power engineering company. Japanese reports said Toshiba’s losses in the nuclear power business stood at an estimated 700 billion yen (7.1 trillion won).
Toshiba, armed with technology and monetary power, is a juggernaut, compared to KEPCO. KEPCO once discussed on its participation in the Moorside project with NeGen, but it made no progress. Things have now changed as Toshiba’s losses in the nuclear power business have come to a head. Toshiba is now out to win KEPCO’s heart, according to some analysts. KEPCO’s acquiring Toshiba’s stake in the British project would cost about 150 billion. In that case, KEPCO is considering participation in the project, including construction. It is possible for KEPCO to team up with Samsung C&T, Hyundai E&C and Doosan Heavy Industries & Construction, which have experience and technology related to nuclear projects, to form a consortium.
“If and when KEPCO is awarded with the Moorside project, Korea will be given an opportunity to strengthen its presence in the global nuclear power in earnest in a brisk manner,” said Prof. Sohn Yang-hoon of Incheon University.
KEPCO Asked to Tide over Challenges and Brace for Uncertainties
KEPCO President Cho Hwan-eik called for his workers to overcome challenges and brace for uncertainties in the months to come.
In his speech at a ceremony to kick off the 2017 business year at the KEPCO headquarters in Naju, Jeollanam-do on Jan. 2, KEPCO President Cho said, “A climate change deal in Paris in 2015 declared the end of the fossil fuel era, but as Trump was elected as U.S. president, fossil fuels are exacerbating uncertainties. A failure to overcome changes could lead to gridlocks or even extinction.” The company may be faced with different challenges and demands if and when the Korean government changes, he added. President Cho warned against “being complacent.”
KEPCO was ranked 1st in the world in the power utility sector on a list of world-class companies selected by the U.S. magazine Forbes in 2016. Cho made it clear how KEPCO rose to top: European, U.S. and Asian utilities leaders made investments in advance, which are yet to be realized. He noted that KEPCO rose to the No. 1 position due to improving financial soundness.
Cho also stressed the importance of being responsive in communication. He called for collective intelligence in which co-prosperity can be evolved through cooperation and understanding to max-out potential.