South Korea could become the next nation to take a stake in the British nuclear industry as the deal with France and China for a new reactor at Hinkley Point in Somerset, England, creates a wave of wider interest.
The move could trigger controversy because the South Korean atomic industry has been hit by a scandal over fake safety certificates, but the UK and South Korea have vowed to help restore credibility and build closer links in the sector.
Lloyd’s Register, which provides risk management services, has been hired by Korea Hydro & Nuclear Power Co to help give the country’s reactors a clean bill of health.
Yet senior executives for the London-based Lloyd’s say the relationship is two-way, with the South Koreans also looking at the best way to enter the British market in the aftermath of Chinese investment in Hinkley Point.
“Discussions are ongoing and I would not be surprised to see, in a year or so’s time, the South Koreans taking an equity investment in the UK market,” said Richard Clegg, a managing director at Lloyd’s Register and a former chief scientist at the UK’s Atomic Weapons Establishment.
British Prime Minister David Cameron met South Korean President Park Geun-hye in London two weeks ago, with media dominated by joint agreements on how to tackle the threat of nuclear weapons in North Korea.
However, the two leaders also promised to increase commercial ties in everything from nuclear power to financial services. The Lloyd’s deal, which was signed on the sidelines, will help over a two-year period with the safety certificate problem that has forced some of the 23 South Korean reactors offline.
Clegg said the Hinkley Point financing agreement between Britain, EDF of France, China Guangdong Nuclear Power Holding Co (中國廣東核電集團) and China National Nuclear Corp (中國核工業集團) had attracted a lot of attention among other potential atomic investors.
Ministers have agreed to guarantee a generous price of up to ￡392.50 (US$633) per megawatt-hour of electricity for 35 years, more than twice the current market rate.
Clegg believes that Toshiba and Hitachi of Japan, which have their own different consortiums for building potential new plants in Britain, can be expected to press ahead with firm investment plans too.
“We have been here before, of course. Sizewell [the last new nuclear plant constructed in Britain] was meant to be the first every year for a decade, but with all the macro-pressures there are now around energy security, my personal judgment is that we will see more than one and we could see six,” he said.
The site after Hinkley is likely to be Sizewell in Suffolk, where EDF and the Chinese have rights to build, and Clegg believes that the far east partners will want to play a bigger role than just taking an equity stake.
“I think we can expect to see the Chinese pushing for their one equipment and supply chain to be used with a longer-term aim of being able to sell nuclear technology into emerging markets such as the Middle East, Africa and southeast Asia,” Clegg added.