Nuclear exports see mounting losses despite a rosy outlook··· Why caution is needed on the Czech nuclear project - 경향신문
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Czech and U.S. nuclear ventures also rife with risk factors
Minister of Trade, Industry and Energy Kim Jeong-gwan answers questions during a plenary session of the National Assembly Committee on Trade, Industry, Energy, SMEs and Startups on the 9th. Yonhap News
Minister Kim Jeong-gwan of the Ministry of Trade, Industry and Energy convened a review meeting on the construction of the Dukovany nuclear power plant in the Czech Republic, a project thrown into crisis after talks with the builders fell apart, and again stressed that the project must proceed without disruption. However, given that many overseas nuclear projects pursued by successive administrations have fallen short of expectations, observers argue that a cautious approach is needed.
On the 12th, Kim presided over the ‘Team Korea Czech Nuclear Project Progress Review Meeting’ at Government Complex Seoul. The Dukovany project is a plan to supply two 1 GW (gigawatt) Korean reactors (APR1000). Although it is a large-scale project worth $18.72 billion (24.8713 trillion KRW), it has run into difficulties, with Korea Hydro & Nuclear Power (KHNP) last month declaring an end to negotiations on a construction contract with a consortium of Daewoo Engineering & Construction and Doosan Enerbility.
At the meeting, Kim said the government would stick to applying for a construction permit in April next year and to a groundbreaking target of November 2029. He added that the selection of a new builder would be finalized by July next year. Kim said, “We take seriously the concerns being raised about normal execution,” and added, “We will fulfill our responsibility so the project can proceed without wavering.”
Nevertheless, critics note that, contrary to the extensive promotion of nuclear export achievements by past governments, the outcomes have not been favorable. This means that, beyond the Czech project, even entry into the U.S. nuclear market as part of a U.S.-focused investment initiative must be assessed rigorously for business viability.
Most notably, for the four-unit Barakah project in the United Arab Emirates (UAE), based on the KEPCO financial statements, cumulative profit and loss from construction work (excluding dividends from the operating company stake) showed a deficit of KRW 135.1 billion as of the end of 2025.
The Lee Myung-bak administration won the Barakah contract in 2009 and mounted a publicity campaign touting it as the first nuclear export and a $40 billion order. The biggest cause of the deficit was schedule delays. Construction periods for each unit were extended by three to five years, increasing costs. KEPCO and KHNP remain in conflict over who should bear those costs.
Promoted by the Yoon Suk Yeol administration in 2022 as the first nuclear export in 13 years, the El Dabaa project in Egypt left a provision for construction losses of KRW 1.2146 trillion as of last year.
KHNP participated in the El Dabaa project as a subcontractor to ASE, a subsidiary of Rosatom of Russia, taking charge of equipment procurement and construction of the turbine building. During contracting, KHNP estimated project costs based on domestic reactors and, before equipment design and quantities were finalized, entered into a lump-sum, fixed-price contract worth KRW 3.3 trillion, resulting in a poorly structured deal.
According to a KHNP disciplinary request obtained last month by Democratic Party of Korea lawmaker Kim Won-i, the KHNP Audit Office concluded that the Overseas Business Development Department involved in the El Dabaa project recognized various risk factors but failed to make sufficient efforts to avoid them, causing losses. KHNP imposed disciplinary measures on two people involved in the project: a one-month suspension and a one-month pay cut, respectively.
A rendering of the new Dukovany nuclear power plant in the Czech Republic. Courtesy of Korea Hydro & Nuclear Power
Many believe the Dukovany project in the Czech Republic likewise carries a high risk of such losses. To begin with, the cap on liquidated damages for delays that KHNP would have to pay and the expected profit margin have not been transparently disclosed.
In audit findings released in May, the Board of Audit and Inspection said that while preparing its bid for the Czech project, KHNP requested from KEPCO materials on the Barakah project, including costs and cost structures, but KEPCO refused on the grounds of trade secrets. The Board of Audit and Inspection pointed out that past, real-project information was not sufficiently reflected in the new bidding strategy, making bid-price calculation difficult. The Energy Transition Forum criticized that, in the end, the Czech bid price was calculated without knowing Barakah’s actual costs.
Concerns have also been raised about expansion into the U.S. nuclear market, designated as the second project under the U.S.-bound investment initiative. According to the Energy Transition Forum, the levelized cost of electricity for new nuclear in the United States is $175-255 per ㎿h(megawatt-hour), up to four times higher than solar ($40-98) and onshore wind ($37-99), suggesting weak business feasibility.
Vogtle Units 3 and 4, the most recent new reactors in the United States, cost $36.8 billion, more than twice the original estimate, and were completed seven years late.
The Energy Transition Forum argued that “Many projects announce orders first and conceal profits and losses,” adding that “Of the projects the government has described as ‘profitable,’ none has disclosed supporting figures, and materials requested by the National Assembly were not submitted on the grounds of confidentiality.”
