Korea's nuclear power industry is expected to enter a second growth phase as plans to build two APR-1400 reactors, a Korean-designed model, were included in the country's investment program in the United States. It marks a reversal of positions 55 years after Korea broke ground on the Kori-1 reactor in 1971 with help from U.S. nuclear company Westinghouse. The United States was among the first countries to build nuclear power plants and holds more reactors than any other nation, giving it an unrivaled standing in the industry. An industry official said the United States is the home of the nuclear industry and led the global construction boom of the 1980s, adding that having a Korean-developed reactor built there carries special significance.
According to political sources on the 22nd, the government reported at a full meeting of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee that it is discussing a nuclear framework with the U.S. side under which eight large reactors would be built in the United States, two of them APR-1400 units.
Korean reactor exports to the United States had been blocked outright by a confidential agreement signed separately last year by KEPCO, Korea Hydro & Nuclear Power and Westinghouse. Under the deal, each time Korea builds a reactor abroad using Westinghouse technology, it must provide Westinghouse with $650 million (about 880 billion won) in contracts for goods and services and pay $175 million (about 240 billion won) in technology license fees. The agreement also barred exports to Europe, excluding the United States, Japan and the Czech Republic. Because Westinghouse holds the intellectual property tied to the core technology behind Korean reactor designs such as the APR-1400, Korea signed the lopsided contract reluctantly.
The two countries have now agreed to waive those restrictions for reactor construction tied to Korean investment in the United States. With President Donald Trump moving to add 300 gigawatts of nuclear capacity and quadruple U.S. nuclear generating capacity, the United States is emerging as the world's largest nuclear market, and Korea has gained a path into it. At an assumed construction cost of $5,000 per kilowatt, the market is worth $1.5 trillion, or about 2,040 trillion won.
The government also secured a safeguard against cost overruns, a chronic problem in large plant projects. Of the $120 billion total for the nuclear framework, $20 billion will serve as a buffer for cost overruns. If reactors are completed within the set budget and schedule, unspent funds will still count toward investment commitments. In advanced economies, construction delays caused by environmental rules and local opposition frequently push costs far above initial estimates. At Vogtle Units 3 and 4, the most recently completed reactors in the United States, the project ran more than seven years behind schedule and costs more than doubled. Japan's investment program in the United States has drawn similar disputes over who bears unexpected construction cost increases, meaning Korea has obtained protection against a comparable problem.
The agreement to use $10 billion of the initial investment funds to order nuclear equipment is also expected to be welcome news for the industry. The United States had originally demanded that Korea send more than $10 billion in cash this year as investment funds. The government accepted the demand but won a commitment that the money would be reinvested in core nuclear equipment. For Korea, a substantial portion of the remitted funds could return as orders for Korean companies, while the United States gains early access to primary equipment that takes four to five years or more to deliver and is a main cause of schedule delays, an outcome described as beneficial to both sides.
In a similar move, the U.S. government signed a strategic partnership with Westinghouse last year, aiming to build 10 large reactors quickly by 2030, and announced $17.5 billion in conditional financing to be used for equipment orders needed for reactor construction. A ruling party official said that even if repaying principal and interest proves difficult, plant construction should be judged by its effect in bringing Korean companies into the U.S. market, adding that securing core equipment orders first has raised the value of the overall negotiation.
