Seoul aims to use strengthened US ties to expand nuclear plant exports

Settlement between Westinghouse and KEPCO is necessary for Washington-Seoul to expand alliance into nuclear energy

Korea Times, By Kim Yoo-chul 26 Feb 23,

Unlike the previous Moon Jae-in administration, President Yoon Suk Yeol and his foreign affairs team are clearly aiming to grow South Korea into a pivotal state given Seoul’s competitive standing to increase interoperability among a range of partners, specifically in the Indo-Pacific region.

This policy drive is backed by his administration’s concerted backing of Washington’s various protectionist industrial policies and regional security agenda items.

South Korea’s support of the Inflation Reduction Act (IRA), CHIPS and Science Act, the country’s participation in a U.S.-initiated Indo-Pacific Economic Framework (IPEF) and Chip 4 alliance are the examples signifying Seoul’s shift toward U.S. policies………………………….

Seoul’s backing of [U.S. President Joe] Biden’s signature industrial and regional security policies illustrates the fact that the country is prepared to withstand any economic and political costs by raising its profile as an advocate of major policy initiatives outlined and being managed by the U.S.’ partners and its like-minded allies,” a senior government official said in a telephone interview, adding that the majority of his comments do not necessarily reflect the official policy or position of South Korea.

Despite Seoul maintaining strategic cooperation with Beijing given its heavy reliance on the Chinese market _ China is the largest trading partner of South Korea _ and China’s huge political influence on North Korea, the Yoon administration’s apparent shift in position favoring the Biden administration’s moves to revive U.S. manufacturing, has so far been successful……………………………………..

Now, as the Biden administration has set its sights on boosting U.S. energy independence, the Yoon administration is hoping to expand its alliance with Washington into nuclear energy, in addition to batteries and chips, security analysts and company officials said.

SMRs emerge as option, legal troubles

The prime goal of the Inflation Reduction Act (IRA) is aimed at addressing rising inflation. However, the IRA also includes several tax incentives for clean energy technologies including advanced small modular reactors (SMRs). This means the IRA will possibly become a game changer for Washington’s participation in the new energy economy……………………

the IRA will have profound effects on South Korean nuclear energy and reactor companies, because they are in a better position to become one of the top beneficiaries of the act,” a trade ministry official said by telephone.

The Yoon Suk Yeol administration has scrapped the former Moon Jae-in administration’s nuclear phase-out policy based on the view that nuclear power is essential for the long-term sustainability of South Korea’s economy and its nuclear power industry. There are hopes that Yoon might reach a consensus with his U.S. counterpart on the sidelines of the Korean leader’s scheduled state-visit to the White House in late April to expand the Washington-Seoul alliance in the area of SMRs, industry sources told The Korea Times………….

U.S.-based Westinghouse and KEPCO, alongside KEPCO’s subsidiary Korea Hydro & Nuclear Power (KHNP), are involved in negotiations over their legal dispute after the U.S. company filed a lawsuit against KHNP in a U.S. federal court to block it from selling reactors to Poland. KEPCO and its subsidiary, KHNP, have been accused of infringing on Westinghouse’s intellectual property rights and Washington’s nuclear export controls.

“Reaching a settlement is highly likely before Yoon’s visit to the U.S. Westinghouse and KEPCO, along with KHNP, have until March 17 this year to address their legal issues. As nuclear technologies have also become a security issue, all parties involved in the legal dispute will have to find a compromise under the principle of reciprocity that won’t hurt national interests,” said Seok Kwang-hoon, a senior analyst at Energy Transition Korea. Westinghouse officials were not immediately available for comment.

“Westinghouse itself has no question about the significance of its commercial partnership with South Korea given the country’s supply chains for future AP1000 nuclear reactors. That means if the ongoing settlement negotiations fail, then this will impact Seoul’s efforts to win reactor deals from Poland and the Czech Republic, the countries categorized as South Korea’s target markets. It’s a plausible idea for South Korean companies to acquire Westinghouse’s property rights,” said Kim Sang-tae, a professor of nuclear engineering at Hanyang University in Seoul. https://www.koreatimes.co.kr/www/tech/2023/02/419_346075.html