Korea may face row with US over Polish projects
Westinghouse Electric Company has filed a suit against Korea Hydro & Nuclear Power (KHNP) and Korea Electric Power Corp. (KEPCO), hindering their plans to export nuclear reactors to Poland. In the lawsuit filed with the U.S. District Court for the District of Columbia, the U.S. firm claims Korea's APR 1400 reactors incorporate the design of the System 80 reactor of Combustion Engineering, which Westinghouse acquired in 2000.
For this, it asserts that the state-run Korean enterprises must seek approval from it and the U.S. Department of Energy if they want to export the reactors, claiming the technology used for the APR 1400 is subject to the U.S. Code of Federal Regulations. The U.S. firm has been competing with the KHNP and KEPCO to receive orders from Poland for the construction of six pressurized water reactors. France's EDF later joined the bidding race in October.
Westinghouse has called on the court to strictly apply U.S. law restricting the inflow of certain reactor technologies to other nations. It also opposes possible funneling of the technologies to other countries seeking to import Korea reactors. This stokes concerns here. For starters, should the U.S. court rule in favor of Westinghouse, the Korean firms will suffer a setback in their bid to export their reactors, worth 40 trillion won ($28 billion).
This will also adversely affect the envisaged exports of reactors to Saudi Arabia and the Czech Republic. The Polish government is set to choose a contractor by year-end. The Czech Republic is seeking to construct one nuclear reactor by 2036 and select a preferred bidder by 2024.
The recent suit will likely cause a fresh trade dispute between South Korea and the United States, after the U.S. legislated the Inflation Reduction Act calling for the exclusion of Korean-made electric vehicles and other EVs assembled outside of North America from tax incentives.
President Yoon Suk-yeol and U.S. President Joe Biden agreed to strengthen cooperation to jointly advance into overseas nuclear reactor markets in their summit meeting in May. Yet, the "nuclear reactor alliance" is facing hurdles due to Westinghouse's self-centered trade policy. This could deal a blow to the Yoon administration's push to export 10 nuclear reactors by 2030.
The prospects of the Korean firms' bidding for the projects in Poland are mixed, regardless of how the U.S. court decides. The KHNP and Poland's energy firm ZEPAK are scheduled to sign a letter of intent (LOI) Oct. 31 to cooperate for a construction project in Patnow, central Poland. Yet, in a separate move, Polish Deputy Prime Minister Jacek Sasin met with U.S. Secretary of Energy Jennifer Granholm on Monday. "We are close to making a decision to choose a partner in the Polish nuclear power project," Sasi said after the meeting.
Market watchers say the Polish government appears eager to choose Westinghouse for state-initiated projects given the need to improve ties with the U.S. while considering the KHNP for private projects. The KHNP said it will exert maximum efforts to respond appropriately to the recent developments. It is time for the government and the state-run companies to double down on winning the projects while minimizing the dispute with the U.S.
Westinghouse Electric Company has filed a suit against Korea Hydro & Nuclear Power (KHNP) and Korea Electric Power Corp. (KEPCO), hindering their plans to export nuclear reactors to Poland. In the lawsuit filed with the U.S. District Court for the District of Columbia, the U.S. firm claims Korea's APR 1400 reactors incorporate the design of the System 80 reactor of Combustion Engineering, which Westinghouse acquired in 2000.
For this, it asserts that the state-run Korean enterprises must seek approval from it and the U.S. Department of Energy if they want to export the reactors, claiming the technology used for the APR 1400 is subject to the U.S. Code of Federal Regulations. The U.S. firm has been competing with the KHNP and KEPCO to receive orders from Poland for the construction of six pressurized water reactors. France's EDF later joined the bidding race in October.
Westinghouse has called on the court to strictly apply U.S. law restricting the inflow of certain reactor technologies to other nations. It also opposes possible funneling of the technologies to other countries seeking to import Korea reactors. This stokes concerns here. For starters, should the U.S. court rule in favor of Westinghouse, the Korean firms will suffer a setback in their bid to export their reactors, worth 40 trillion won ($28 billion).
This will also adversely affect the envisaged exports of reactors to Saudi Arabia and the Czech Republic. The Polish government is set to choose a contractor by year-end. The Czech Republic is seeking to construct one nuclear reactor by 2036 and select a preferred bidder by 2024.
The recent suit will likely cause a fresh trade dispute between South Korea and the United States, after the U.S. legislated the Inflation Reduction Act calling for the exclusion of Korean-made electric vehicles and other EVs assembled outside of North America from tax incentives.
President Yoon Suk-yeol and U.S. President Joe Biden agreed to strengthen cooperation to jointly advance into overseas nuclear reactor markets in their summit meeting in May. Yet, the "nuclear reactor alliance" is facing hurdles due to Westinghouse's self-centered trade policy. This could deal a blow to the Yoon administration's push to export 10 nuclear reactors by 2030.
The prospects of the Korean firms' bidding for the projects in Poland are mixed, regardless of how the U.S. court decides. The KHNP and Poland's energy firm ZEPAK are scheduled to sign a letter of intent (LOI) Oct. 31 to cooperate for a construction project in Patnow, central Poland. Yet, in a separate move, Polish Deputy Prime Minister Jacek Sasin met with U.S. Secretary of Energy Jennifer Granholm on Monday. "We are close to making a decision to choose a partner in the Polish nuclear power project," Sasi said after the meeting.
Market watchers say the Polish government appears eager to choose Westinghouse for state-initiated projects given the need to improve ties with the U.S. while considering the KHNP for private projects. The KHNP said it will exert maximum efforts to respond appropriately to the recent developments. It is time for the government and the state-run companies to double down on winning the projects while minimizing the dispute with the U.S.
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