KEPCO opposes single-window nuclear export system

KEPCO CI

Korea Electric Power Corp. (KEPCO) has expressed opposition to calls for creating a single export window for South Korea’s nuclear power projects, arguing that the current dual-track structure with Korea Hydro & Nuclear Power (KHNP) should be maintained in favor of a functional cooperation model.

According to sources on Monday, KEPCO stated in a policy briefing to the Ministry of Trade, Industry and Resources (MOTIR) on Jan. 8 that “an expansion strategy based on building a cooperative framework, rather than unifying the export system, is more desirable.” KEPCO proposed a division of roles in which it would handle marketing and financing, while KHNP would be responsible for nuclear plant construction.

The government is currently reviewing options to streamline nuclear export governance, including the possible creation of a third independent body, raising expectations that any overhaul of the system could take considerable time.

At present, KEPCO and KHNP often duplicate efforts in marketing, financing and construction on a country-by-country basis. In regions requiring design modifications, KHNP typically takes the lead, while KEPCO handles projects elsewhere. Critics have long pointed to inefficiencies in this arrangement, prompting the MOTIR to explore reforms to the nuclear export governance framework.

In its briefing, KEPCO argued that for engineering, procurement and construction (EPC) projects, it should lead business development and marketing efforts to secure contracts, while relying on KHNP’s cooperation during the construction phase. Under the proposed model, both entities would sign contracts jointly, after which KHNP would take the lead in construction under KEPCO’s overall oversight.

KEPCO also emphasized its strengths in financial investment, recommending that large-scale financing be handled exclusively by the utility. The company noted that institutional measures, such as formal regulations, would be required to support a function-based cooperation system.

Industry observers say KEPCO’s stance runs counter to the MOTIR’s apparent preference for restructuring the export system through a third independent organization. While the ministry has floated several alternatives — including consolidation under KEPCO or KHNP, or functional role-sharing — concerns persist that full unification under either entity would trigger resistance from the other. As a result, policymakers are reportedly deliberating how to structure the governance of a potential independent body.

KEPCO’s proposal closely resembles the functional role-sharing option, though critics argue it differs little from the current setup. A nuclear engineering expert said KHNP’s leadership remains essential in winning export contracts due to the importance of technical expertise. “KHNP can exist without KEPCO, but KEPCO cannot realistically carry out nuclear export projects without KHNP,” the expert said, adding that KEPCO’s heavy debt burden could also limit its ability to secure low-cost financing despite its experience in financial structuring.

KEPCO responded that it had merely suggested improvements to the existing cooperation framework.

The briefing also addressed the ongoing settlement dispute over the Barakah nuclear power plant project in the United Arab Emirates. KEPCO and KHNP are at odds over an additional 1.4 trillion won ($959 million) in construction costs for the project, which KEPCO won in 2009 and KHNP built. KHNP has demanded reimbursement from KEPCO, while KEPCO maintains that additional costs must first be recovered from the client, Emirates Nuclear Energy Company (ENEC). In May last year, KHNP filed for arbitration with the London Court of International Arbitration (LCIA).

KEPCO said it would seek to recover as much of the disputed amount as possible through negotiations with ENEC, while stressing that KHNP’s decisions as the arbitration claimant would be critical. The utility also noted that the dispute stems from the contract structure and should not be directly linked to the broader debate over export system unification.