KEPCO: Korea Enters the Global Nuclear Power Market
Sun-Young, Hong, SERI Quarterly
Nuclear plants, KEPCO, Three Mile Island, Chernobyl, APR-1400 reactor
THE WORLDWIDE REBIRTH OF NUCLEAR POWER
The first era of nuclear energy came to an end in 1989, three years after a disaster at Russia's Chernobyl power station expelled a cloud of fallout that unnerved the world and shadowed the industry for years. By then, the world had 367 nuclear reactors, but in the ensuing decades, only 69 new ones would survive local opposition to reach completion and come online. Today, however, soaring energy consumption, high oil prices, and concerns about pollution and global warming have sparked renewed interest in safe nuclear power. Nuclear plants, which boast high efficiency and zero greenhouse emissions, are making a comeback all over the world.
In the US, nuclear power stations are being built for the first time since the Three Mile Island crisis in Pennsylvania in 1979, while in Europe, long the most nuclear averse region, construction of new plants is being actively considered in Britain, Germany, and Italy. Emerging economies like China, India, and the Middle Eastern nations have readily embraced nuclear power as a means of satisfying their growing power needs and reducing their greenhouse gas emissions.
According to data released by the World Nuclear Association (WNA) in October 2010, some 430 new nuclear power stations will be online by 2030, creating a $1 trillion dollar market. The market for upgrading aging plants is nearly as large, at $77 billion, or Z 88 trillion. With 54 percent of all reactors more than 20 years old, numerous maintenance projects will be commencing soon. By any standard, nuclear power is experiencing a worldwide rebirth.
KEPCO: KOREA'S FIRST SUCCESSFUL ENTRANT TO THE GLOBAL NUCLEAR INDUSTRY
Naturally, the rapid revival of the nuclear industry has spurred intense interest and competition between plant builders. Until recently, however, nuclear power has been an industry dominated by an exclusive club of French, Japanese, and US companies, and even these ranks have been thinning as the industry undergoes consolidation. Over the past few years, nuclear power has experienced a broad trend towards conspicuously multinational partnerships, mergers, and acquisitions. Toshiba of Japan acquired Westinghouse of the US in 2006; while Areva (France) and Mitsubishi (Japan), General Electric (US) and Hitachi (Japan), and AtomEnergoProm (Russia) and Siemens (Germany) have all pursued joint ventures with each other. Thus, when the United Arab Emirates chose a consortium1 led by KEPCO (Korea Electric Power Corporation) to design, construct, and operate four nuclear plants for $40 billion, it took the industry by surprise. KEPCO's bid for the planned nuclear plant is the largest energy contract in the history of the Middle East.
The deal, announced on December 27, 2009, made Korea the sixth country to join the club of nuclear plant exporting nations2, and brought worldwide attention to Korea's nuclear power industry for the first time. The project itself, which involves building four of KEPCO's 1.4GW APR-1400 reactors amounts to $20 billion, while earnings from operations, maintenance, fuel supplies, and waste disposal over the plant's 60-year life span will amount to another $20 billion in export income. By the end of the 10-year construction period, KEPCO's UAE plant is forecast to create employment effects equivalent to hiring 110,000 persons (as measured in man days3).
KEPCO was able to secure the UAE deal despite being (as far as the global market is concerned) a latecomer to the nuclear plant industry. In reality, however, KEPCO has been building nuclear plants every year for the past thirty years, virtually without interruption. This stands in marked contrast to the experience of firms overseas, many of whom had ceased plant construction on public fears of another Chernobyl or Three Mile Island. The UAE project is thus …
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Publication information: Article title: KEPCO: Korea Enters the Global Nuclear Power Market. Contributors: Sun-Young, Hong - Author. Magazine title: SERI Quarterly. Volume: 4. Issue: 1 Publication date: January 2011. Page number: 72+. © Not available. Provided by ProQuest LLC. All Rights Reserved.