Phasing out of nuclear plants to be financed through fund

The phasing out of of nuclear power plants will be paid for through a fund financed through electricity bills paid by the public. The cost of scrapping nuclear power plants projects and dismantling is estimated at more than 660 billion won.

Wolsong reactor 1 that has been fully stopped since late 2019 in Gyeongju. [YONHAP]

The phasing out of nuclear power plants will be paid for through a fund financed through electricity bills paid by the public.

The cost of scrapping nuclear power plants not yet built or partially built and dismantling the Wolsong reactor 1 is estimated at more than 660 billion won ($554 million).

The Moon government has promised to wean Korea off nuclear power because of safety risks highlighted by the 2011 Fukushima nuclear disaster in Japan. It is a controversial policy because of Korea's contradictory desire to export its nuclear power technology, and its commitments to reduce carbon emissions.

According to the Ministry of Trade, Industry and Energy on Thursday, the government has decided to cover the cost of its nuclear power phase out through the Korea Electric Industry Foundation Fund, which is used to finance energy related technologies or projects, starting next month. That fund gets 3.7 percent of electricity bills people pay.

The five nuclear power phase-out projects that will be financed through the fund are of the Daejin 1 and 2 reactors in Samcheok, Gangwon, the Cheonji 1 and 2 reactors in Yeongdeok, North Gyeongsang, and the Wolsong reactor 1 in Gyeongju, North Gyeongsang.

The fund will be used to finance expenses already incurred for nuclear plants that haven't been built yet, such as buying land and getting government approval.

Yet the government said it decided not to include the Shin-Hanul reactors 3 and 4 in Uljin, North Gyeongsang, as Korea Hydro & Nuclear Power Co. (KHNP) wants that project to continue. The government has not made a decision on its fate.

The deadline for a final decision on whether to approve construction of the two nuclear reactors is December 2023.

In the case of the Wolsong reactor 1, the main expenses will be the dismantling of the plant, which will cost 565 billion won or nearly 85 percent of the total fund.

The cost of cancelling Cheonji reactors, which haven't been built, is estimated at around 97.9 billion won. For the Daejin reactors, also not built yet, the cost is estimated at 3.5 billion won.

In the case of Cheonji reactors, KHNP has already purchased the site. In the case of Daejin, the project was called off by the government at an early stage.

Among the power plants, Wolsong remains the most controversial as the power plant was switched off far ahead of its life expectancy.

KHNP announced in 2018 that it was shutting off the Wolsong reactor 1. It was turned off in late 2019.

It was the second nuclear power plant to be shut down by the Moon government. The first was Kori reactor 1 in Gijang, Busan in 2017.

Wolsong 1 was the second-oldest reactor in the country, having gone into commercial operation in 1983. The reactor’s life span was extended to 2022 under Moon’s predecessor, Park Geun-hye.

It was estimated to have cost roughly 700 billion won to extend the life of the reactor.

Its early closure has haunted the Moon administration.

Moon’s first Minister of Trade, Industry and Energy, Paik Un-gyu, has been indicted for tampering with figures and abusing his position to pressure KHNP to close it.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]