S. Korean nuclear power firms buoyed by Amazon’s big energy push

2024. 10. 17. 15:35
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"As we anticipate lots of demand for the construction of SMRs to provide electricity to data centers in the future, Doosan Enerbility will continue to develop cutting-edge manufacturing technology and expand facilities for the mass-production of SMRs."

"We have built a nuclear power plant before," said the DL E&C official. "An SMR is a small nuclear power plant. There will be various uses for SMRs such as industrial complexes once the necessary technology is developed. We expect to co-develop businesses in the future including the construction of (SMRs)."

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Shares of Doosan Enerbility, DL E&C surge on possible SMR deals
Amazon's data center in Oregon (Amazon)

Amazon’s decision to invest in clean energy projects to meet the increasing energy demands of artificial intelligence has raised expectations for South Korean companies in the nuclear power sector.

Amazon announced Thursday that it signed three new agreements to support the development of nuclear energy projects, including the construction of several new small modular reactors, or SMRs. Amazon joined a recent series of nuclear energy pledges by big tech companies such as Google and Microsoft.

“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers while helping us progress toward our climate pledge commitment to be net-zero carbon across our operations by 2040,” said Matt Garman, CEO of Amazon Web Services.

“One of the fastest ways to address climate change is by transitioning our society to carbon-free energy sources, and nuclear energy is both carbon-free and able to scale, which is why it’s an important area of investment for Amazon. Our agreements will encourage the construction of new nuclear technologies that will generate energy for decades to come.”

Of the three agreements, Amazon said it is investing in X-Energy, a next-generation SMR developer, as the online shopping and web services giant’s climate pledge fund unveiled that it is the lead anchor in a $500 million financing round for X-Energy. According to Amazon, the investment includes manufacturing capacity to develop SMR equipment to support more than five gigawatts of new nuclear energy projects using X-Energy’s technology by 2039.

Doosan Enerbility and DL E&C -- two Korean companies in the nuclear power plant sector -- invested $5 million and $20 million in X-Energy last year, respectively.

As a global SMR foundry, Doosan Enerbility aims to supply key equipment and design core machinery for smaller nuclear power plants, while DL E&C looks to conduct not only engineering, procurement and construction, or EPC, of SMRs, but also contribute to their operation and maintenance.

An official at Doosan Enerbility said that Amazon's large-scale investment represents a chance to expand its SMR businesses.

“On top of X-Energy, we are also working closely with NuScale for SMRs,” the official added.

“As we anticipate lots of demand for the construction of SMRs to provide electricity to data centers in the future, Doosan Enerbility will continue to develop cutting-edge manufacturing technology and expand facilities for the mass-production of SMRs.”

An official at DL E&C commented that Amazon’s bet on X-Energy shows how close the latter is to the commercialization of SMRs.

“We have built a nuclear power plant before,” said the DL E&C official. “An SMR is a small nuclear power plant. There will be various uses for SMRs such as industrial complexes once the necessary technology is developed. We expect to co-develop businesses in the future including the construction of (SMRs).”

Following the news of Amazon’s investment in nuclear energy, a number of Korean SMR-related companies’ stock prices surged when the market opened Thursday.

The stock of Seojeon Electric Company, a local developer of heavy power and energy equipment, once hit its upper limit at 5,370 ($3.92) won per share on the country’s secondary tech-heavy bourse Kosdaq with a jump of almost 30 percent from the day before. Seojeon Electric Company's stock ended at 4,775 won per share by the day's closing.

Shares of Doosan Enerbility and DL E&C listed on Korea’s main bourse Kopsi closed at 21,150 won and 32,100 won, respectively, up 8.68 percent and 7.18 percent compared to the previous day’s closing price. The stock price of Doosan, the energy-to-equipment conglomerate's holdings firm, also finished the day at 210,000 won per share, up 10 percent from the previous day.

“Most SMR projects are expected to debut their first commercialized reactors between 2030 and 2032,” Heo Min-ho, an analyst at Daishin Securities, noted Thursday in a company report on Doosan Enerbility.

“Given that the manufacturing process has not been reduced, the contracts for SMRs will begin to take shape in the second half of next year. Considering that big tech companies are expected to bolster their power supply contracts through SMRs in the future, the competitiveness and growth of the SMR business can be highlighted before actual orders are secured.”

By Kan Hyeong-woo(hwkan@heraldcorp.com)

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