Korea beats the world to $20 billion nuclear jackpot

South Korea has beaten the US, Europe and Japan at their own game to land the country's first international nuclear power project.

Korea Electric Power Corporation (Kepco) has won a contract to build and operate four nuclear reactors in the United Arab Emirates, beating out rival bids from a U.S.-Japanese consortium comprising General Electric and Hitachi, as well as a French team of GdF Suez, Areva, and Total.

Construction of the reactors alone is expected to be worth more than $20 billion, not to mention Kepco will be in the driving seat for future lucrative service contracts. This deal, announced Dec. 28, marks the first full-scale nuclear development in the Arab country.

Although Japan’s main bid failed to be accepted by the UAE government, it is nonetheless a junior partner in the Korean consortium through Westinghouse and Toshiba Power Systems. These companies apparently possess patented technologies necessary to build third-generation light water reactors.

David Adam Stott reported for the Shingetsu Institute that Japan had become the fourth major player to sign a nuclear cooperation agreement with the UAE on January 19, 2009. This followed a week-long visit by a UAE delegation, led by Muhammad al-Hammadi, CEO of the Emirates Nuclear Energy Corporation, to Tokyo in December 2008 to meet representatives of Mitsubishi Heavy Industries, visit a nuclear power plant, and tour Hitachi and Toshiba nuclear factories.

Westinghouse is to supply equipment, engineering, and fuel-service contracts to the Korean consortium. The precise value of these Japan-affiliated contracts is unclear, but is likely to be substantial.

Michael Penn

APP Nonresident Senior Fellow

Executive Director, Shingetsu Institute