The Republic of Korea is the latest nation to makes motions toward the eventual cessation its nuclear energy programme, begging questions as to the motivations of the new Korean President, Moon Jae-in. NFA questions why one of East Asia’s most established nuclear players is abandoning nuclear and what this move may mean for the region and the industry as a whole...
The Asian nuclear industry is suffering somewhat of a minor meltdown with Korea being the second nation in a little over half a year to jump ship on nuclear. A major global producer of nuclear energy, South Korea entered the NPP community in the 1970s. It now is a major exporter of nuclear technology and NPP construction and is heavily involved in a number of projects in the Middle East. This 180 degree turn on nuclear will have aftershocks felt long into the future, especially following the abandonment of nuclear by Southeast Asia’s most advanced nuclear market, Vietnam last November.
Seven months ago the Vietnamese parliament voted overwhelmingly to walk away from nuclear (NFA: “Vietnam’s Nuclear Implosion”, November 2016) citing a number of safety, political and potential national security concerns. Alongside the standard reasons for scrapping nuclear, such as project costs and lack of public acceptance, Vietnam’s plants bordered the South China Sea and with growing unrest hovering over those waters, the Southeast Asia’s most sophisticated nuclear state failed to hold its nerve. Analysts would be forgiven for thinking that this similarly sudden decision by the Moon Administration, is based on a number of common foundations. Not only was scaling down to eventual abandonment an election promise of the centre-left President Moon, but South Korea’s nuclear facilities are within easy striking range of the ROK’s volatile and erratic neighbor to the north.
Even the threat of such a strike on the nuclear infrastructure of the densely populated nation would raise the emergent need for immediate mitigation by any new government trying to make its mark on national security.
From a political perspective, Korean nuclear, and more generally Korean power, is graft laden. As an election pledge, then presidential candidate Moon promised to take his geom to graft and cronyism, including the ills of the chaebol system. But scandal and the Korean power sector have from time to time been almost synonyms. Four years ago, scandal emerged involving forged safety certificates and the use of counterfeit parts in NPPs. Two plants (Kori 2 and Shin Wolsong 1) were shutdown as a result, later in the year scores of power industry executives were arrested and indicted for the falsification. The indicted included those at the very top of the power industry, a former chief executive of Korea Hydro & Nuclear Power and a vice-president of Kepco. President Moon was elected with a strong mandate, in large part due to his vows to act like all good populist leaders should, in the words of another world leader, ‘Drain the swamp’.
“In our view,” says Ambassador Ong Keng Yong, Executive Deputy Chairman, S. Rajaratnam School of International Studies and former ASEAN Secretary-General, “The South Korean nuclear industry is well-entrenched and well-connected; so it remains to be seen how it can influence the government, apart from President Moon, on the electoral promise, in terms of moderating it.”
Ambassador Ong continues that although such a decision is sovereign to the people of Korea, there is a definite double-edged sword dangling over the Republic’s energy sector. “From the standpoint of environmental concerns, pursuing renewables should always be welcomed and encouraged. At the same time, it should always be checked with the actual potential of renewable sources in Korea - there may not be sufficient renewable sources to offset the base-load electricity that could be generated by nuclear.” The Ambassador adds, that scrapping a plan to build new reactors and implementing bans on extending the life of older reactors will decrease the total installed capacity by a few gigawatts, a precious margin to Koreans.
A shock to the system
President Moon is not prevaricating in implementing his election promises. A former student activist and human rights lawyer, he fully understands that he was elected on a mandate of change and re-building the general public’s confidence in its leaders, following the successful impeachment of conservative Presendent Park Geok-un. President Moon has promised to suspend any current construction of new NPPs as well and scrap all construction plans. While the populist President will be applauded by his supporter-base for backing election promises, the impact on the Korean economy of this decision will be significant. Twenty-five reactors in the Republic supply one-third of nation's electricity. Until the election of President Moon, nuclear energy remains a strategic priority for South Korea, with a planned increase by 70% to 38 GWe by 2029, according the World Nuclear Association. South Korea is highly dependent on nuclear: the nation imports 96% of its energy. Approximately one third of all imports, equivalent to $170 billion is spent on energy (2011) and scrapping nuclear will add $20 billion to this bottom-line.
More significantly, if the President’s election promise fully materialises, South Korea will lack energy for the short-term at least and energy prices will rise. “The government is planning to increase the ratio of power generation based on new and renewable energy sources to at least 20% in this regard, but it is still insufficient,” said a June 8 Business Korea report …… “No country in the world has given up on both nuclear and thermal power plants at the same time while increasing the use of alternative energy sources,” said Professor Jung Bum-jin at the Department of Nuclear Engineering of Kyung Hee University in the same report. President Moon is planning on turning toward LNG and alternatives to solve the self-inflicted power pain that his nation is about to suffer, but history suggests that these sources will not immediately fill the void left by abandoning nuclear.
In Part Two of this feature, to be released before the end of June, we compare and contrast the Korean experience with that of Germany and we look at the possible silver-lining for competing nuclear vendors in the region.