South Korea's Nuclear Safety and Security Commission on 18 June approved the restart of unit 3 at the Shin Kori NPP, which was shut down in January for scheduled maintenance. The decision was taken after planned maintenance was completed at Shin-Kori 3, an Ap-1400 pressurised water reactor. South Korea currently operates 24 power reactors that generate 27% percent of its total electricity. However, Korea Hydro and Nuclear Power’s (KHNP’s) board of directors recently decided to shut down unit 1 at the Wolsong NPP, South Korea’s second oldest reactor, before the end of its lifetime. KHNP CEO Chung Jae-hoon said this is in line with the government’s plans to reduce nuclear power in the national energy mix. Wolsong 1, a 657MWe Candu 6 unit, began commercial operation in 1983. Its 30-year operational licence expired in 2012 but was extended for 10 years to 2022. KHNP said its decision was based on the "uncertain economic viability" of its continued operation and recent low operating performance.
Chung added that KHNP will also drop plans to build four new units - two at Cheonji and two at Daejin. The company said it will sell land it has already purchased for the Cheonji plant. Earlier, KHNP said it will resume construction of units 1 and 2 at Shin-Hanul NPP and units 4-6 at Shin-Kori, despite the government’s nuclear phase-out plans. Under a December 2017 plan by president Moon Jae-in’s government, South Korea intends to scrap new-build programmes and will not extend the lifetime of existing nuclear units, aiming to decrease the number of reactors to 14 in 2038. Moon, who was elected president in May 2017, had campaigned on a programme of cutting South Korea's reliance on coal and nuclear and shifting to renewable and LNG-fueled plants. South Korea’s oldest power reactor, unit 1 of the Kori NPP was closed in June 2017.
Chung said on 8 June that KHNP will shift its focus to new markets abroad by providing comprehensive energy solutions to create a new business model in face of the nuclear phase-out plan at home. He said every effort is being made to search for opportunities in “strategic markets,” including Czech Republic, Slovakia, Poland and the Philippines. “We will knock on any door, seeking whatever benefits we can get,” Chung said in a meeting with reporters in the southeastern coastal city of Ulsan. “The Korean nuclear industry can survive as long as it finds ways to complement it business model.”
The nuclear phase-out policy has directly affected KHNP, which earns most of its profits from electricity sales to parent company Korea Electric Power Corp. Chung said the new policy had forced KHNP “to the open ocean and seek new opportunities.” KHNP predicted annual net profits of KRW12.5bn ($11.59m) for this year, down 98.5% from KRW861.8bn in 2017. In addition to exports of nuclear reactors, Chung said the company will explore ways to increase profits from other sources, including energy consulting, maintenance and data management. According to Digital Chosun on 19 June, cancellation of reactors already under construction has resulted in losses of KRW122.8bn, while KRW93.7bn had already gone into planning four new reactors and KRW700bn had been spent to extend the life span of Wolsong 1.
The KHNP has been vying for a nuclear plant construction project in Saudi Arabia, following its $20bn contract with the United Arab Emirates in 2009. The Czech Republic is expected to announce a financing plan for a nuclear project later this year, while the Philippines is also considering nuclear power to meet growing energy demand. However, the decision to shut down Wolsong 1 and to cancel plans for new reactors is raising concern that it will adversely affect export plans, the Korea Times reported on 18 June. "It is worrisome since the decision is likely to lead to contraction in the country's nuclear energy industry, which is globally competitive," said Song Jong-soon, a professor of nuclear engineering at Chosun University. While the shift to renewable energy is global trend, there is concern that a sudden transition will demolish Korea's nuclear energy industry. According to a report on the industry, seven conglomerates and 1,993 SMEs participate in the construction of two nuclear reactors, offering jobs to 15,000, The Korea Times noted.
The government plans to focus on exports but nuclear energy supporters say this will not be enough to sustain the nuclear ecosystem. "On top of the demolition of the ecosystem, it will have a sudden negative impact on exports," said Chung Bum-jin, a professor of nuclear engineering at Kyunghee University. The falling operation rate of nuclear reactors following stronger safety checkups coupled with surging global oil prices have increased electricity costs for KEPCO, which says the average purchasing price stood at KRW95.92 per kWh in April, up 25.5% in the past year. The share of cheap nuclear power fell to 21.9% from 31.7%, while LNG-fueled electricity rose to 30.6% from 18.3%. If the price of electricity does not increase, KEPCO will face financial limitations in playing its role of absorbing external shocks to protect the internal economy, noted Kang Seong-jin, an analyst at KB Investment and Securities.