The country has built up the best large-scale atomic-energy industry outside China and Russia. Now it stands to reap financial and diplomatic rewards.
A machine the height of an eight-story building is working around the clock in the South Korean port city of Changwon, bearing down on massive slabs of red-hot steel with the force of 240,000 men. Doosan Enerbility Co.’s forging press—the world’s largest of its kind—sculpts the glowing, hissing metal into shafts for ships, rollers for steel mills and other building blocks of global industry.
These days, it’s making a lot of parts for nuclear reactors.
South Korea has been developing its homegrown atomic technology for decades, with an eye on both its own rising energy consumption and a growing global urgency to shift away from fossil fuels. Now this quietly efficient industry, thriving on the country’s southeastern coast and across the East Asian nation, is attracting the attention of Western countries eager to add to their own reliable, low-emission power at an affordable price—without involving Russia or China, the world’s leading nuclear builders.
“Energy demand is surging, and people are asking for clean power that’s available 24 hours a day, seven days a week,” says Jongwoo Kim, a vice president at Doosan. “Nuclear is the only option that delivers both.”
As companies such as Amazon.com, Microsoft and Meta Platforms line up to use more nuclear, the message is clear: More reactors are needed, urgently. According to Clean Air Task Force, a climate nonprofit, as much as $9 trillion of nuclear investment will be required in the next quarter century to triple nuclear capacity—roughly $250 billion a year.
What’s less obvious is who’s going to build it, given the extent to which an already concentrated industry has shrunk under pressure from high costs, long timelines, heavy regulation and political pushback. The US and France, once the cornerstone of the industry, have a history of cost overruns and delays. Russia and China, the sector’s heavyweights, are struggling to attract Western buyers because of national security concerns. (The UK recently decided to move ahead with a nuclear power project without Chinese support, reflecting a hardening stance against the country.) And Japan is still catching up after the Fukushima disaster of 2011. That leaves South Korea, a relatively new kid on the block when it comes to nuclear exports, in a position to seize the lucrative opportunity.
South Korea Poised to Benefit From Nuclear Power Boom
Planned and proposed nuclear power reactors by location
Note: Planned reactors have approvals, funding or commitment in place and are mostly expected to be operational within the next 15 years. Proposed reactors have specific program or site proposals, but timing is very uncertain. Data as of May 1.
According to a Bloomberg Businessweek analysis of the more than 400 planned and proposed nuclear reactors around the world, it’s positioned to win business with as many as 43% of them, setting the country up to become one of the biggest exporters of atomic technology over the next decade. China, set to become the world’s top nuclear power generator by around 2030, will be a major supplier, but primarily to its domestic market.
“We can deliver a nuclear power plant on time and on budget,” says Kum Yong Jang, Changwon’s acting mayor. “That’s why the rest of the world is interested in Korean technology.”
Korea pledged in 2022 to export 10 reactors by the end of the decade. Its first venture abroad was the $20 billion Barakah project in the United Arab Emirates, a contract won in 2009 and completed in 2023. What made industry veterans take notice was that it did it with limited delays, a remarkable feat in a sector known for its gargantuan overruns. “People were very skeptical,” says Chanho Ahn, director of the new-energy division at Hyundai Engineering & Construction Co., which was responsible for building the four reactors. “We did exactly the same thing with what we’ve done so far in Korean projects.”
The next test will come in Europe. A South Korean group—led by Korea Hydro & Nuclear Power Co. (KHNP)—was selected as the preferred bidder for a Czech project last summer over Électricité de France SA to build two nuclear reactors in a $18 billion project. In early May, a Czech court temporarily blocked the government from signing the deal after EDF challenged the outcome. The European Commission has also raised concerns.
Korea pledged in 2022 to export 10 reactors by the end of the decade. Its first venture abroad was the $20 billion Barakah project in the United Arab Emirates, a contract won in 2009 and completed in 2023. What made industry veterans take notice was that it did it with limited delays, a remarkable feat in a sector known for its gargantuan overruns. “People were very skeptical,” says Chanho Ahn, director of the new-energy division at Hyundai Engineering & Construction Co., which was responsible for building the four reactors. “We did exactly the same thing with what we’ve done so far in Korean projects.”
The next test will come in Europe. A South Korean group—led by Korea Hydro & Nuclear Power Co. (KHNP)—was selected as the preferred bidder for a Czech project last summer over Électricité de France SA to build two nuclear reactors in a $18 billion project. In early May, a Czech court temporarily blocked the government from signing the deal after EDF challenged the outcome. The European Commission has also raised concerns.
In contrast, nuclear development in the US ground to a halt after the 1979 Three Mile Island accident near Harrisburg, Pennsylvania. France’s industry had to deal with public opposition after the Chernobyl disaster in Ukraine in 1986. Japan suffered its major meltdown in 2011. All endured years of inactivity and a loss of expertise; South Korea has so far avoided that fate. Its reactor designs have been certified for use in Europe by the European Utility Requirements organization, and its decades of experience have trained an army of skilled workers who know how to build complex power systems that generally avoid the costs overruns and delay pitfalls of other projects.
South Korea Has Mostly Avoided Cost Overrun Pitfalls
Manufacturing cost of a nuclear power reactor in select countries, in dollars per kilowatt
Note: The US reactors is Vogtle 3 and 4; UK is the Hinkley Point C project, which is under construction and final cost is the current estimate; France is Flamanville 3; Korea is Saeul; UAE is Barakah
For all the enthusiasm, Korea’s industry has also had stumbles. There have been questions about its willingness to use low-cost migrant labor available in the Middle East—one of the key reasons Barakah was able to stay on budget, according to Kyoungsook Choi, energy and climate change coordinator at the Korea Federation for Environmental Movements, an activist group. That makes the project hard to replicate in the Czech Republic, where the government expects KHNP to hire local workers who will command higher wages. “The UAE project is not a success story,” Choi says. (KHNP declined to comment, though the project’s main contractor, Korea Electric Power Corp., says the UAE deal should be considered a rare success, given the frequent delays and cost overruns in large-scale nuclear projects.)
Korea also still lags the industry’s behemoths. China, the top builder, has 30 reactors under construction, nearly half the global total, using primarily homegrown technology. Its flagship Hualong One reactor can be built at a fraction the price of Western units—even if it has only been exported to one site so far, in Pakistan. Russia has spent years honing its own technology and has exported reactors to buyers in India, Iran and elsewhere.
Domestic turbulence and political change at home could also get in the way of Korea’s ambitions. In April the country’s Constitutional Court unanimously upheld the impeachment of President Yoon Suk Yeol, a staunch nuclear supporter. With Yoon out, the frontrunner to replace him is Lee Jae-myung, leader of the main opposition Democratic Party. Lee hasn’t made any official announcement regarding his nuclear policy. In the past, though, Lee has pledged not to build reactors and to decommission units at the end of their life. This could signal a more cautious approach from the state, particularly in areas such as financial guarantees. “Who is willing to take on the huge financial risk of construction? Nuclear projects are almost always too big for one single utility, vendor or bank to finance,” says Radiant’s Nelson. “Korea takes on huge financial risk as a state to offer competitive packages to interested countries.”
One saving grace is that issues elsewhere have been equally—or more—painful. Take Hinkley Point C in the UK, built by EDF. The two reactors are now due to be completed and online by around 2030 after multiple delays and at an expected cost of almost £48 billion ($64 billion) in current terms. Or the US, where two reactors at the Vogtle plant in Georgia developed by Westinghouse Electric Co. were seven years late and more than 100% over budget. Meanwhile, Doosan, the owner of the Changwon forging press, expects its order backlog for nuclear equipment to balloon threefold, to 20.6 trillion won ($14.4 billion), by 2029. The company built parts for the Georgia plant and will supply components for NuScale, the only SMR design so far to receive US approval.
“If I was advising a country to build large reactors,” says Chris Gadomski, lead nuclear analyst for BloombergNEF, “I would suggest the Koreans.”
Source: Bloomberg
