Seoul National University Nuclear Policy Center: "Limits of KEPCO-Centered Nuclear Export Overhaul"... Calls for Fundamental Structural Reform

KEPCO Faces Financial Weakness and Risk of Renewed Joint Contract Disputes
Proposal for Establishing Nuclear Power Corporation or Intermediate Holding Company
Need for Enacting a Special Act Also Stressed

Academics have raised concerns that the government's plan to restructure the nuclear power plant export system, which is currently underway, faces limitations in global competition if it remains a stopgap measure.

The Nuclear Policy Center at Seoul National University, in a statement released on April 24, commented on the plan to unify the export channel under Korea Electric Power Corporation (KEPCO). The Center acknowledged the significance of addressing the need to resolve the dual-channel system, but pointed out that the plan contains structural limitations when it comes to consolidating export capabilities across the entire nuclear power industry value chain.

The Center specifically singled out KEPCO’s financial health and structural role as core issues. With KEPCO carrying a cumulative deficit and over 200 trillion won in debt, it inevitably faces limits in leading export financing and international negotiations. The Center also stressed that, because nuclear power plant exports are long-term projects spanning decades, the creditworthiness and financial stability of the main contractor in the early stages are especially critical.

Additionally, the Center noted that more than 20 years have passed since KEPCO’s nuclear business functions were transferred to Korea Hydro & Nuclear Power following the 2001 restructuring of the electricity industry. As a result, there are restrictions in terms of nuclear technology and construction management capabilities. Currently, fewer than 200 personnel in KEPCO are involved in nuclear projects, making it difficult to independently undertake overseas business due to a lack of field experience, among other reasons.

The Center also expressed concerns about the joint main contract model, which is the centerpiece of the current restructuring plan. They noted that the fundamental cause of the past dispute in the UAE Barakah nuclear power plant project was the lack of a single decision-making entity. As such, a joint main contract structure could lead to a recurrence of conflicts over responsibility in cases of design changes, construction delays, or additional costs.

Furthermore, the Center pointed out that the current discussion focuses primarily on redefining the relationship between KEPCO and Korea Hydro & Nuclear Power, thereby excluding the value chain of the broader nuclear power industry. The Center explained that nuclear export competitiveness can only be secured when various entities—such as KEPCO Engineering & Construction (design), Doosan Enerbility (equipment manufacturing), KEPCO Nuclear Fuel (nuclear fuel), KEPCO KPS (maintenance), and construction companies like Hyundai Engineering & Construction and Samsung C&T—are organically integrated. The current plan, however, does not sufficiently reflect this structure.

The Center emphasized the need for a fundamental structural overhaul rather than a simple agreement-based approach. Specifically, it proposed establishing a 'Nuclear Power Corporation' to oversee the entire nuclear business, or setting up a nuclear intermediate holding company under KEPCO as alternatives. This would allow for the establishment of a unified decision-making system and enable the integrated management of the entire project cycle, including business development, construction, and operation.

In addition, the Center identified the enactment of a 'Special Act on Support for the Nuclear Industry' as an urgent task to support this restructuring. The Center explained that this legislation should include a government support system for the entire cycle of nuclear exports, workforce development, financial and technological support, and an institutional foundation for expanding private sector participation.

The Center noted that major competitors such as Russia, China, and France are all promoting nuclear exports with vertically integrated structures under a legal framework at the national level. The Center pointed out that Korea's reliance solely on inter-agency agreements cannot ensure competitiveness.

The Center also analyzed that now is a 'golden time' for restructuring the export system, citing global demand for new nuclear power plants expected to reach 600 GW and about 3,000 trillion won by 2050. The recent success in securing the Dukovany nuclear power plant project in the Czech Republic has opened the door to the European market, and new markets are simultaneously emerging in Saudi Arabia, Vietnam, Turkiye, the Philippines, and Romania.

The Center stated, "Reorganizing the nuclear export system goes beyond reconciling inter-agency interests; it is directly linked to national industrial competitiveness," emphasizing, "We should seize this opportunity not to stop at a mere agreement, but to establish a fundamental foundation for Korea to emerge as a global nuclear powerhouse."

This content was produced with the assistance of AI translation services.