Westinghouse interrupts Korea's Czech nuclear deal

This photo shows nuclear power units in Dukovany, a city located 170 kilometers southeast of the Czech Republic's capital Prague. (Korea Hydro and Nuclear Power)

Korea’s multibillion-dollar deal to build nuclear plants in the Czech Republic has been put at risk with US-based Westinghouse Electric Co. filing an appeal with the Czech's antimonopoly watchdog Tuesday, challenging Korea Hydro & Nuclear Power's position as the preferred bidder.

"KHNP’s APR1000 and APR1400 plant designs utilize Westinghouse-licensed Generation II System 80 technology," Westinghouse said in its press release.

"KHNP neither owns the underlying technology nor has the right to sublicense it to a third party without Westinghouse's consent. Further, only Westinghouse has the legal right to obtain the required approval from the US government to export its technology."

Last month, the Czech government picked KHNP as the preferred bidder to build two nuclear reactors in Dukovany, with the value of the project estimated at 24 trillion won ($17.3 billion).

Westinghouse, which claims the Korean power agency needs its permission to export the nuclear reactors, said it has lodged a complaint with the Czech Anti-Monopoly Office to protest the decision by CEZ Group -- the majority-government-owned utility conglomerate overseeing the project -- to select KHNP as the preferred bidder.

The US nuclear power company said it submitted a proposal to CEZ to deliver the advanced AP1000 reactor, boasting a modular construction design and the smallest footprint per megawatt electric.

In an apparent move to attract the attention of policymakers and to pressure the government ahead of the presidential and congressional election in November in the US, Westinghouse also claimed Korea's "unlawful" export is taking away American jobs.

"In addition to unlawfully using US technology, deploying the APR1000 over the AP1000 reactor would also export the creation of tens of thousands of Czech and US clean energy jobs to Korea, including 15,000 jobs from Westinghouse’s home state of Pennsylvania," the company said, adding that it will continue to vigorously defend its intellectual property rights.

Westinghouse, which had also submitted a bid for Czech's massive nuclear deal, was excluded from the tender earlier in the year for failing to fulfill the required tender conditions.

Upon Westinghouse's announcement, Korea's Industry Ministry underscored the Czech firm was "well aware" of the ongoing lawsuits and disputes KHNP had with Westinghouse in choosing the preferred bidder, and that the government will keep up negotiations with the US government.

"Westinghouse is repeating its claim as the lawsuit continues, and the Czech client was aware of (the dispute) when choosing KHNP as the preferred bidder," the ministry said in a statement.

"The Korean government continues to negotiate with the US government under the solid Korea-US alliance framework to resolve the corporate dispute."

The ministry added that it will closely communicate and work with Czech authorities and provide detailed explanations when requested.

KHNP also maintains that it has worked its way up to successfully develop its own nuclear technology, and the Korean nuclear reactor APR1400, collaborating with domestic and other global companies in the past decades.

The contract for the two Dukovany units is poised to be finalized by March 2025, and the project is expected to break ground in 2029 with the goal of completion by 2036.

Westinghouse and KHNP have a long history of conflict over the development of nuclear reactors spanning decades. Westinghouse introduced nuclear power generation technology to Korea in 1969, building the country's first Kori nuclear power plant in Busan.

In 1997, Westinghouse signed an agreement to transfer its related technologies to KHNP and also inked a licensing deal to allow Korea to sell products with the technologies in 2007.

Despite their joint agreements, Westinghouse has been putting a wedge in Korea's export of its nuclear reactors. When Korea successfully bagged an export deal with the United Arab Emirates to build a nuclear plant in Barakah in 2009, Westinghouse issued similar complaints over the technology license. At the time, the dispute was settled after Westinghouse came into the project to take supply orders for components such as Reactor Coolant Pumps and turbine equipment.

In October 2022, Westinghouse filed a legal complaint against KHNP when the Korean firm inked a letter of intent with counterparts in Poland to build at least two nuclear power units.

The US District Court dismissed the case, saying nuclear export control is "entirely" with the US government and that Westinghouse has no standing to sue. The company has appealed.

By Jo He-rim(herim@heraldcorp.com)