As domestic companies such as Doosan Energy and DL E&C decided to invest in the US X-Energy, cooperation between Korea and the US Small Module Nuclear Power Plant (SMR) has become more sticky. This is because Korean companies made equity investments in all three major SMR companies in the US while the leaders of Korea and the US decided to strengthen cooperation on nuclear power plants, including SMR, in May. Considering the characteristics of US companies, which tend to place orders considering the size of their stake, it is evaluated that Korean companies have laid the foundation for responding to the expansion of the global SMR market.
“Korea Helps to Win SMR Orders”
The US government saw that it was no longer difficult to build new large-scale nuclear power plants, and shifted its nuclear power policy to SMR-oriented. It has launched unprecedented support through financial support and tax benefits. Among them, the three companies selected for the US Department of Energy’s SMR support program are NuScale Power, Terra Power, and X-Energy.
The company that has come closest to commercializing SMR is Newscale Power, a leader in the third-generation nuclear power plant (pressurized water reactor method). As the only company that has obtained design approval from the US government, it aims to start commercial operation in Idaho in 2029. In Korea, in 2019, Doosan Enervity, Whale Investment, and Industrial Bank of Korea invested $44 million together. It was the first investment by a Korean company in an American SMR company. Since then, Samsung C&T and GS Energy have also participated as partners. NuScale Power’s main equipment is manufactured by Doosan Energity, Engineering, Procurement, and Construction (EPC) by Samsung C&T, and development projects in Asia are expected to be handled by GS Energy.
Terra Power and X-Energy are the leaders of the 4th generation SMR, which are promoting the commercialization of SMR with sodium cooling method and hot gas cooling method, respectively. TerraPower was founded in 2008 by Microsoft founder Bill Gates, and SK Group invested $250 million in August. Doosan Energity and X-Energy signed a contract for manufacturing and designing main equipment in August 2021, before Korean companies discussed this $130 million investment. X-Energy is likely to entrust the production of main equipment to Doosan Energy, and the EPC and Asian regional development projects to DL E&C. An industry insider said, “I understand that Newscale Power has placed orders dozens of times in proportion to the amount of investment.”
Solidified Korea-US SMR cooperation
This investment has made the nuclear power alliance between Korea and the US even stronger. President Yoon Seok-yeol and US President Joe Biden declared at a summit in May, “We will further expand nuclear cooperation and jointly use (nuclear) export promotion and capacity development tools.” In particular, he expressed his will for the ‘SMR Alliance’, saying, “By establishing a resilient nuclear power supply chain, we will accelerate the development and deployment of advanced nuclear reactors and SMRs around the world.”
The SMR market is expected to grow rapidly. According to the British Royal Atomic Energy Research Institute, the global SMR market is expected to grow to a maximum of 630 trillion won by 2035. It is an observation that regarding 300 SMRs will be installed around the world.
The US government’s support to preoccupy the SMR market is unprecedented. The U.S. Department of Energy announced in October 2020 that it would provide $1.04 billion for NuScale Power’s first SMR. In May 2020, it was decided to support 50% of the SMR demonstration and investment costs of X-Energy and Terra Power through the Next Generation Reactor Development Program (ARDP). The total amount of support for X-Energy reaches $1.2 billion.
Jeong Dong-wook, a professor at the Department of Energy System Engineering at Chung-Ang University, said, “The SMR cooperation between Korea and the US at the private level is encouraging.”
Reporter Lee Ji-hoon lizi@hankyung.com