KEPCO wins UAE civil nuclear bid

4 January 2010

A Korea Electric Power Corporation (KEPCO)-led consortium has beaten those of GE+Hitachi and Areva to win a USD20 billion tender for four 1,400MW civil nuclear power reactors in the United Arab Emirates.

KEPCO APR 1400 diagram
KEPCO APR 1400 diagram

The deal would see four Generation-3 APR-1400 reactors built. The APR1400 is similar to the Combustion Engineering System 80+ design built at Palo Verde in the USA. The first of the four units is scheduled to begin providing electricity to the grid in 2017, with the three later units being completed by 2020. No sites have yet been named for the reactors.

According to the Emirates Nuclear Energy Corporation (ENEC), a 'high percentage' of the contract will be fixed price. The UK's Financial Times quoted unnamed analysts who said that the Korean consortium's price played an important role in winning the contract. ENEC also said that it and the Korean consortium have agreed terms under which Korean investors would take an undisclosed amount of equity investment in the project.

KEPCO's scope of supply includes engineering, procurement, construction, nuclear fuel and operations and maintenance support with the assistance of other Korean members of the KEPCO team, including Samsung, Hyundai, Doosan Heavy Industries and KEPCO subsidiaries. Its subsidiary Korea Hydro and Nuclear Power Co., Ltd. (KHNP), which will play a key role as the Engineering, Procurement and Construction (EPC) contractor. Other subsidiaries involved include operator Korea Power Engineering Co., Inc. (KOPEC), for nuclear power plant design and engineering services, Korea Nuclear Fuel Co., Ltd. (KNF), for nuclear fuel, Korea Plant Service and Engineering Co., Ltd. (KPS), for plant maintenance. Non-Korean companies involved in the KEPCO team include Westinghouse of the US, and Toshiba of Japan.

KEPCO, a government owned-utility, is the world's third largest nuclear energy business with an installed nuclear generation capacity of 17,716MW as of the end of 2008. KEPCO operates 20 commercial nuclear power units as of 2009, with eight more units currently under construction and an additional 10 units planned to be built by 2030. The contract marks the first time the Korean reactors have been exported.

The first of the APR1400 units, Shin-Kori units 3&4, are now under construction, having obtained a construction permit from the Korean regulatory authority. Shin-Kori unit 3 will be connected to Korea's grid by 2013. The first UAE nuclear power plant will be the fifth unit of the APR1400 plants in the world, and Shin-Kori plants will serve as the "reference plants" for the UAE program. As such, KEPCO will construct plants that are essentially the same as the "reference plants," but supplemented with changes required to adapt to UAE climactic conditions and any specific requirements of the UAE nuclear safety regulator, the Federal Authority for Nuclear Regulation (FANR).

The APR1400 safety system is designed to prevent or mitigate severe accidents by ensuring reactor shutdown, removing decay heat, maintaining the integrity of the containment facility, and preventing radioactive releases. It is designed to meet the procedural requirements and criteria of the US NRC regulations, including the post Three Mile Island (TMI) accident requirements for new plants. In addition, the building and structures in the UAE plants will be designed to fulfill the latest requirements for earthquake safety and aircraft impact resistance.

ENEC is in the process of developing and implementing a strategy for the management of all nuclear fuel cycle activities including the procurement, use, and short- and long-term management of nuclear fuel for its nuclear power plants.

In 2008 the UAE developed a nuclear energy policy that avoids domestic fuel enrichment and reprocessing to ease international nonproliferation concerns.

ENEC's year-long prime contractor selection process was designed to identify the best long-term partner for the UAE. ENEC focused on five core criteria in reaching its final decision: safety, deliverability (start-up by 2017), compliance with a prime contractor structure, human resource development in the UAE and commercial competitiveness. A team of 75 dedicated experts evaluated the bids over the past year.

KEPCO is expected to begin mobilizing its team in Abu Dhabi immediately. Mr. Hee Yong Lee, one of KEPCO's most senior executives, will lead the UAE project. A trained nuclear engineer, Lee has worked for KEPCO for more than 30 years in the fields of construction management, quality assurance, long-term power planning, as well as in training, commissioning and operations at nuclear power plants. Lee has also worked for KEPCO in New York and Paris, specializing in quality surveillance, manufacturing oversight and contract management of overseas construction projects. He also served as quality assurance manager for the commissioning of Yonggwang units 5&6. Earlier in his career, Lee served as a simulator instructor and shift supervisor as a licensed senior reactor operator at Ulchin units 1&2 and Yonggwang units 1&2.

The contract also calls for extensive training, human resource development, and education programs as the UAE builds the capacity to eventually staff the vast majority of the nuclear energy program with national talent, and develops the industrial infrastructure and commercial businesses to serve a thriving nuclear energy industry.

ENEC has joined with the Khalifa University of Science, Technology and Research, the Institute of Applied Technology, the Federal Authority for Nuclear Regulation, other parts of the UAE educational system, as well as universities internationally to ensure that there will be a reservoir of talent, both Emirati and expatriate, well into the future. Current estimates are that the program will need between 2,100 and 2,300 staff by 2020. ENEC is committed to ensuring that talented Emirati women and men play a major role in the program - occupying positions of authority and responsibility in all aspects of the nuclear energy industry.

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