Korea eyes NuGen stake

26 March 2017

Korea Electric Power Corp (Kepco) has dismissed speculation that it is consiering buying Toshiba’s controlling stake in US-based Westinghouse, but confirmed an interest in joining the NuGen consortium that is planning to build the Moorside NPP in the UK using Westinghouse technology. 

Kepco president Cho Hwan-eik said on 22 March: “We have no plan to acquire Toshiba’s stake [in Westinghouse] . . . there is no role for us there”. However, Cho said Kepco would be keen to take Toshiba’s 60% stake in NuGen, once the sale conditions have been clarified. “The basic sales structure has not been set yet although intense negotiations are going on between the UK and Japan. We will be the first to jump into the race once the sales conditions including debt and equity are decided,” he said. Toshiba, which is facing serious financial problems, largely stemming from massive cost overruns incurred by Westinghouse on two US NPPs, has made clear its intention to pull out of NuGen.

Kepco had been identified by industry experts as the only potential acquirer of Westinghouse that would be acceptable from a national security perspective. Analysts say possible contenders from China and Russia would probably be blocked by the USA and the UK, while others, such as Mitsubishi Heavy Industries and Hitachi, have already denied any interest.

Kepco has been in talks for months about investing in NuGen, the Financial Times reported, citing people involved in the process. Kepco is seeking to enter the UK nuclear market as part of its ambition to become the world’s third-largest exporter of nuclear reactors by 2030. As part of the NuGen consortium it would most probably seek to substitute its own reactors for the planned Westinghouse AP1000s.

In 2009 Kepco won a $20bn contract to supply the United Arab Emirates with four reactors, beating traditional suppliers such as France’s Areva and Westinghouse. However, it has been less successful since then, despite having proved its reliability and efficiency on the UAE project.  Kepco now is looking at possible deals in South Africa and Saudi Arabia, in addition to the UK project,  and hopes to sell six more reactors by 2020.

Kepco had previously said it would consider the purchase of Westinghouse if approached by Toshiba. With Westinghouse now facing a $6.3bn write-down, and possibly planning to file for bankruptcy, Kepco has reconsidered its approach. “Global interest in building new reactors is decreasing, especially in advanced countries, and we don’t know how much further losses Westinghouse would incur,” said Suh Kyun-ryul, professor of atomic engineering at Seoul National University.

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