Korea will lose over 3.5 bill. dollars after pullout from nuclear energy

“Construction of the No. 5 and No. 6 reactors of Shin Gori nuclear power plant will be halted for some time to review whether to continue the project through analysis of all of the related matters,” Kim Jin-pyo, head of the policy planning and advisory committee, said Thursday in a program briefing to the Ministry of Trade, Industry and Energy, the Korea Hydro & Nuclear Power and the Nuclear Safety and Security Commission. The construction project for two reactors started last year after the Nuclear Safety and Security Commission approved it. The project progress rate is currently 28 percent. It is quite an unprecedented event for a new administration to suspend construction of nuclear reactors after handover of the presidency. Korean President Moon Jae-in’s decision could have a significant impact to Korea’s energy policy framework in place.

Moon has made his pledge during the presidential race, saying, “I will review nuclear policies again from the beginning.” Moon has also made his commitments during the race to suspend construction of the Shin Gori 5 and 6 reactors, to scrap a plan to operate or design a new nuclear reactor and to raise the share of renewable energy, including solar or wind power, to 20 percent in our energy portfolio by 2030. Though it has been confirmed that Korea is no longer safe from earthquake after the incident in Gyeongju last year, the Moon administration should refrain from calling for an exit from nuclear power without providing a practical and reliable solution, while Korea lacks energy resources and imports more than 98 percent of its energy from overseas.

So far, Korea has already spent more than 1.34 billion dollars (1.5 trillion won) on construction of the Shin Gori 5 and 6 reactors. If the project is nullified, the loss will increase to as much as much as 1.78 billion dollars (2 trillion won) including some spending from contract cancellation. Furthermore, it has been reported that the government has spent hundreds of millions of dollars on preparing construction of the Shin Hanul 3 and 4 reactors and the Cheonji 1 and 2 reactors. The writer is curious if Korea’s energy security is strong enough and nuclear energy is threatening and unsafe to an extent that Korea has to move away from nuclear power at this moment despite of the amount of the money the government spent. Moreover, the pullout from nuclear energy should start from shutdown of outdated reactors such as the Wolseong 1 reactor, instead of scrapping the construction project for new reactors. It seems absurd and unreasonable. The Shin Gori 5 and 6 reactors are the same model of products that the government exported to the United Arab Emirates. If the government cancels the project, it will lose its opportunity to sell them overseas.

Energy policy is like a balloon: If you push on one side, the other side will expand. For example, if nuclear power is abandoned and renewable energy production remains small, thermal generation needs to be expanded to offset the shortage. In this case, fine particle dusts will show up more. In order to reduce the amount of fine dusts, gas production should substitute thermal production. However, this requires more imports of liquefied natural gas and thus trade deficit will grow. After all, the price of electricity will increase and people will be more stretched.

Despite of more than 10,000 annual earthquake incidents and the lingering trauma from the Fukushima disaster, the Japanese government had to make a decision to expand the share of nuclear power to 20 percent by 2035 because Japan has no other option but to depend more on nuclear energy for its energy security. For the same reason, 230 energy professors in Korea have expressed their concerns Thursday over the government’s rapid abandonment of nuclear energy, saying, “State energy policy must be executed through a series of discussions with experts and incorporation of the public’s comments.” The government should design and introduce energy policies with a long-term perspective through engagement with the public. Political discord or populistic approach should be avoided.