Korea clinches $18b Czech nuclear plant deal

Korea has secured an $18 billion contract to build two nuclear reactors in the Czech Republic, marking its first nuclear reactor export in 16 years and its first entry in the European nuclear power sector.

The Czech government on Wednesday announced that a contract will be signed with the Korean consortium led by Korea Hydro & Nuclear Power on May 7, as it decided to acquire an 80 % stake in Elektrarna Dukovany II, a subsidiary of state-owned power company CEZ, to facilitate the deal.

CEZ initially planned to build a single reactor at its Dukovany nuclear power plant with government loans and guarantees. However, after the government decided to increase the number of reactors to be built to two, CEZ has been looking for alternative financing options.

Korea’s Ministry of Trade, Industry and Energy welcomed the Czech government’s announcement on the official signing date of the contract, adding that the two countries are discussing the details of the signing ceremony.

The Korean consortium, which includes affiliates of state-run Korea Electric Power Corp. and private firms such as Doosan Enerbility and Daewoo Engineering & Construction, competed against Westinghouse of the US and France’s EDF for the Czech nuclear project. Team Korea ultimately was selected as the preferred bidder to build the reactors last year, as it highlighted its cost competitiveness and construction capabilities.

Wednesday’s announcement came after the Czech Republic’s competition authority rejected EDF’s appeal last week against the tender decision that picked the Korean consortium.

KHNP and Kepco came to a settlement with Westinghouse over an intellectual property dispute in January. Westinghouse previously claimed that KHNP’s nuclear reactor designs used its Washington-licensed technology after Korea was chosen as the preferred bidder for the Czech nuclear project.

Although the terms of the agreement were not disclosed, some industry experts said KHNP may have offered subcontracts or royalties to Westinghouse to settle the issue.

As the Czech project will give the Korean nuclear sector a presence in Europe for the first time, the Korean government has inched closer to its goal of exporting 10 nuclear reactors by 2030. Korea’s first overseas nuclear reactor project was with the United Arab Emirates in 2009.

The first of the new reactors is forecast to begin operation in 2036. Korea will deliver the APR-1000 reactors to the Czech Republic. Featuring 1,055 megawatts of power output, the APR-1000 reactor received European certification in 2023.

According to KHNP, it has identified over 200 Czech suppliers and signed more than 76 memorandums of understanding with local companies since 2016, as it looks to have the maximum involvement of Czech companies in the nuclear construction project.

The Czech government is aiming to expand the proportion of nuclear-powered energy from 40.7 % last year to 50 % by 2050. As the Czech Republic plans to build two more reactors at its Temelin nuclear power plant, the Korean consortium is expected to secure the right of first offer once the project’s plan is finalised.

Kan Hyeong-woo

The Korea Herald

Asia News Network