Koreans will not save Westinghouse, but launch a ‘nuclear’ push in Europe – including Britain and Czechia

The financial crisis at Japanese company Toshiba and its US subsidiary Westinghouse is playing into South Korea’s major global ambitions in nuclear power. And the Koreans are now making it clear that they have calculated exactly how best to join the world’s nuclear elite.

Until now, many observers have also linked South Korean ambitions with hopes for Westinghouse, which, together with its Japanese parent, is going through the biggest crisis in its history. If the Koreans bought the US company, they could prevent its looming bankruptcy. The Japanese owners of Westinghouse would merely be replaced by owners from another country that maintains friendly relations with the West – and above all with the United States. Chinese or Russian owners, for example, would be welcomed in America far less enthusiastically.

However, major South Korean company KEPCO, which is majority-controlled by the state, has now indicated that it is not interested in Westinghouse. Cho Hwan-eik, head of the South Korean energy corporation, instead said that KEPCO is interested in taking over Toshiba’s existing majority stake in the UK’s Moorside nuclear power plant, where three new reactors are planned. With a 60% stake, KEPCO would become the leader of the NuGen consortium, which will operate the plant, while the remaining stake belongs to French company Engie.

Gateway to Europe

The Korea Times has already presented this KEPCO acquisition as virtually a done deal. According to other sources, it is only waiting for Toshiba to submit an offer, as the company still needs to finalise certain matters concerning the sale with the UK government. In any case, the latest reports confirm that Toshiba and KEPCO are indeed holding intensive talks on such a transaction.

Either way, the head of the South Korean corporation is effectively signalling that KEPCO is already launching its planned expansion into Europe. Britain is set to become its gateway to the continent, but the Koreans are also showing interest in building their nuclear power plants in other European countries – including Czechia.

The only difference is that while KEPCO itself is interested in the British market, potential projects in continental Europe (again including Czechia) have since last year been handled by a subsidiary of the corporation – namely Korea Hydro and Nuclear Power (KHNP). KHNP has expressed interest in building new reactors at Dukovany or Temelín and recently took part in consultations in Prague, alongside other global companies.

Czech government commissioner for nuclear energy Ján Štuller noted in an interview with oEnergetice that the Koreans are even offering two types of reactor – the better-known APR-1400 and the smaller APR-1000. In doing so, they are also accommodating the expected preferences of the Czech side, which may favour smaller reactors, particularly at Dukovany.

Among export leaders

Taking over the UK project from Toshiba could be an exceptional development for the Koreans not only in terms of their interest in the European market, but also in view of their global ambitions. Korea wants to rank among the world’s three largest exporters of nuclear reactors by 2030. Seoul apparently expects that it will then compete with two powers that are currently making their presence strongly felt in nuclear power – Russia and China.

So far, however, the Koreans have met their plans with mixed success. In 2009, they won their first major overseas contract to build four nuclear reactors in the United Arab Emirates, and so far the project appears set to succeed. KEPCO can therefore enhance its reputation at a time when projects by Western companies such as Westinghouse, and especially France’s Areva, are being criticised over huge cost overruns and construction delays.

After its success in the Emirates, however, the Koreans were unable to secure another overseas project for a long time. They are now negotiating the possible construction of new units in South Africa and Saudi Arabia.

Risky Westinghouse

While taking over a specific project from Toshiba fits fully into the Korean strategy, KEPCO has apparently assessed taking control of a company such as Westinghouse as a risky undertaking. Acquiring Westinghouse, for which its earlier takeover of construction company Chicago Bridge & Iron proved highly unprofitable, would entail a number of uncertainties – whether regarding unclear prospects for the US company’s future projects on world markets or doubts over whether a Westinghouse that had been ‘cleaned up’ one way or another would offer nothing but financial benefits.

The Koreans are currently betting on having their own technology. Ironically, however, they acquired a significant part of this technology in the past by taking over know-how from Westinghouse itself.

An opportunity for Czechia?

oEnergetice previously noted that, in the Korean view, their cooperation with Czechia could also take on a broader scope. The Koreans (like other global companies in nuclear power) speak of Czechia’s “advantageous geographical position” in the centre of Europe. They also appear to be aware of the Czech nuclear industry’s long-standing tradition.

This could be quite important if the Koreans were to win a contract anywhere in Europe and decide that they do not necessarily have to transport all components from their homeland halfway around the globe. The actual scope of such Czech-Korean cooperation cannot, of course, be predicted; many Czech companies still see greater opportunities with Rosatom, with which they have historical ties. At the very least, however, it can be said that representatives of Korean companies in Prague have presented a similar interest in cooperation with Czech firms quite credibly.

It is also a fact that last year the Koreans confirmed their intention to form strategic partnerships with global nuclear companies, intended precisely to strengthen exports and their ability to meet the diverse requirements of importers.

The author works as a consultant and energy project specialist at the HATcom agency.