[News Focus] Energy industry in wait-and-see mode upon Moon’s anti-nuclear policy

The State Affairs Planning Advisory Committee, the new administration’s de facto transition committee, has since withheld its decision to halt the construction of the Shin-Kori No. 5 and 6 plants, upon opposition from the nuclear power industry and residents in the area. “We will decide on Shin-Kori No. 5 and 6 after an in-depth review and discussion of the overall safety of nuclear power,” said committee chief Kim Jin-pyo on June 2.

Meanwhile, public energy firms have been trying to cater to the president’s pledges. Korea Hydro and Nuclear Power said on June 1 that the company will spend some 1 trillion won ($890 million) in the renewables sector by 2023, upon completing its 5-megawatt solar power plant construction at a site where it initially planned to build nuclear plants.

“As a public company, the KHNP will carry out its responsibility by expanding its investment in renewable sectors,” KHNP Chairman Lee Kwan-sup said.

However, the companies and subcontractors that are responsible for constructing nuclear power plants are taking a wait-and-see approach, as possible financial losses are expected.

As of the end of April, state-run nuclear operator KHNP had 1.5 trillion won invested in the Shin-Kori No. 5 and 6 reactors, which are currently under construction with a processing rate of some 28 percent, according to the company’s official.

The KHNP also recently ordered a temporary halt of the pre-construction processes for the No. 3 and 4 reactors at Shin Hanul nuclear power plant, where the company had made a contract worth some 400 billion won with a subcontractor.

“The company is waiting until the new administration gives further instructions,” a KHNP official said.

Their caution is echoed by experts who claim that any premature moves could jeopardize the related industries and weigh on the nation’s economy.

At a press conference at Korea Press Center in Seoul on June 1, nuclear engineering professors issued a statement asking the government to consult with experts and discuss with citizens to finalize the nation’s power generation plan. The professors argued the nation may face a shortfall of electricity supply if the government orders the halt of operations of existing nuclear power plants and scraps construction plans for new nuclear power plants.

On Thursday, members of the Korean Nuclear Society, the Korean Radioactive Waste Society and the Korea Atomic Industrial Forum released a statement containing nine reasons that nuclear power is necessary. They noted that nuclear power comes with the world’s lowest electricity bill as well as minimal creation of ultrafine dust and greenhouse gases.

An environmental engineering professor at the Catholic University of Pusan, Kim Jwa-kwan, who was also the head of President Moon’s energy policy team during the presidential campaign, agreed the government might have to raise electricity prices, but not to the extent that it would hurt households.

Kim expects some 14,000 won of electricity costs will be added to the monthly average electricity bill of a household -- 55,000 won for usage of 350 kilowatt-hours per month.

Kim’s energy team’s blueprint was to have nuclear power account for 18 percent of energy by 2030, from the current 30 percent, while increasing the contribution of liquefied natural gas to 37 percent.

Korea’s overseas exports of nuclear power facilities and technologies are also expected to take a hit if the administration pushes ahead to eventually get rid of all nuclear power plants down the road, experts said.

“The nation’s nuclear power industry will not be able to remain competitive in the global market if it cannot build and operate nuclear power plants domestically,” said Joo Han-gyu, a nuclear engineering professor at Seoul National University. “Without domestic demands, the industry will not be able to either sustain the infrastructure here or export facilities and technologies.”

In 2009, KHNP’s parent company Korea Electric Power Corp. won its first overseas contract worth some 20 trillion won to build four nuclear reactors in United Arab Emirates. The processing rate of the Barakah Nuclear Power Plant construction was at 80 percent as of April, a Kepco official said.

Kepco is currently considering participating in NuGen, a Toshiba-led nuclear plant project in the UK, which is worth some 20 trillion won. The company is currently looking for an adviser for its possible stake purchase in the joint venture between Japan’s Toshiba and France’s Engie.

Kepco’s target is to export six additional nuclear power plants worldwide by 2025, worth some 30 trillion won if the target is achieved, according to a Kepco official.

Amid mixed reactions and speculations, the government held a follow-up meeting on June 2, mainly to reaffirm the government’s stance on nuclear issue and also to emphasize that the government would carry out examination processes.

The presidential transition team reiterated the importance of reducing the nation’s dependence on nuclear power, during a meeting with the NSSC, the Ministry of Trade, Industry and Energy and the KHNP.

“Nuclear power plants are clustered in the southeast region. Korea is no longer a quake-free nation as we saw through the earthquake in Gyeongju,” said Kim Jin-pyo, the head of the Presidential State Affairs Planning Advisory Committee. “It is time to forsake obsessions over nuclear power and be rational.”

The presidential transition team also said it would try to minimize the side effects on the economy in dealing with nuclear policies.

Moon’s pledges had been in line with environmentalists and the public’s growing safety concerns over nuclear power plants, especially after Japan’s Fukushima disaster in 2011. Local citizens from Gyeongju in 2015 filed a lawsuit against the Nuclear Safety and Security Commission’s operation extension approval for Wolsung No. 1 nuclear unit.

Concerns grew further in 2016, the year a record-breaking earthquake rattled Gyeongju. It marked the strongest earthquake recorded in the country since measurements began in 1978.

Meanwhile, the country’s power supply has exceeded demand since a temporary shutdown of eight decades-old coal-fired power plants, government data showed Sunday.

Starting June 1, the aged thermal power plants, including four in South Chungcheong Province, closed for business for a month in line with the government’s moves to curb air pollution.

Maximum power demand came to 68,853 megawatts on the first day of the shutdown, while generation capacity reached 81,837 megawatts, leaving electricity reserves at 19 percent.

By Shim Woo-hyun (ws@heraldcorp.com)