According to a South Korean English language news media report for 08/24/24, the government of South Korea is in talks with unnamed US government officials to resolve the intellectual property dispute between Westinghouse (WEC) and Korea Hydro & Nuclear Power (KHNP).
Last year, a U.S. district court dismissed the lawsuit, determining Westinghouse did not have “standing” to compel the federal government to take regulatory actions regarding exports of US nuclear technologies.
WEC claims the South Korean reactor uses WEC design information, e.g., intellectual property, and therefore would be considered to be a US export. However, the District Court’s decision was not on the merits of this claim, but rather that WEC “lacks a private cause of action.” WEC appealed the decision. In 2023 WEC and KHNP entered into arbitration over the dispute which remains unresolved.
A South Korean consortium, led by KHNP, was named as the preferred bidder for a nuclear power plant project in the Czech Republic last month. The project is estimated to be worth about $18 billion.
In geopolitical terms, if the IP dispute with WEC is resolved, it will clear the way for KHNP to negotiate a contract with CEZ, the Czech state-owned nuclear utility, to build at least one and as many as four APR1000 (South Korean design approved for use in the EU) in that country – two a Dukovany and two more at Temelin.
According to the Korea Times report, the South Korean Presidential Office said it was in close discussions with the U.S. government to resolve a dispute between the two countries’ companies over a nuclear power plant construction project in the Czech Republic.
“We are in talks with the U.S. government through various channels to smoothly resolve the dispute,” an official at the office said, referring to the conflict between the Korea Hydro & Nuclear Power (KHNP) and Westinghouse Electric Company (WEC).
The Presidential Office said it plans to “closely consult” with the U.S. on the matter to successfully export Korea’s nuclear power plant to the European country.
“The governments of Korea and the United States have also reached a consensus that the two sides need to cooperate on all aspects of energy, from nuclear power to renewable energies, including hydrogen,” the presidential office said.
President Yoon Suk Yeol’s staff are arranging a visit to the Czech Republic next month to deepen bilateral economic ties and discuss the nuclear power project.
Saudi Nuclear Deal Still Pending
If the WEC IP dispute is resolved, it will also remove one of the barriers related to a Saudi tender for two full size nuclear reactors. A decision on that tender has been twice postponed, once last December and again this past July.
The US has given tacit support to a “win” by South Korea as part of an effort to block China from winning the bid for the first two reactors in what is still a planned fleet of up to 16 nuclear power stations.
It is likely that there will not be a decision by the Saudi government on the nuclear tender until other Middle East diplomatic issues are resolved including an end to hostilities in Gaza.
Additionally, the Saudi government has asked for US technical assistance with its nuclear energy program and support for enrichment of uranium. US Senate ratification of these arrangements, if submitted by the Biden Administration, which would also include a bilateral mutual defense agreement. It is unlikely to take place this year. Opposition in the Senate is focused on nonproliferation issues if the Saudi’s start enriching uranium. The Saudi leader, Mohammed bin Salman (MBS), has said repeatedly that if Iran develops nuclear weapons, he will too.
Poland Reactor Deals Depend on Government Funding
South Korea has also won a deal, at least in principle, in Poland for as many as three reactors, but WEC has also sought to block it over the IP dispute. Separately, WEC has a deal in Poland to build multiple versions of its AP1000 reactor.
Both the South Korean and Westinghouse deals will require Poland to fully fund these contracts. KHNP offered to take a minority equity stake in its project. However, WECÂ rejected an overture by Poland to do the same for its project.
The Polish government has struggled over time to come up with the money to fuel its nuclear power ambitions. The government has blown hot and cold regarding these financial commitments due to changes in the country’s political leadership.
Currently, the Polish legislative branch is considering a plan to allocate EUR14.05 billion to be spent between 2025-2030 on the WEC reactors. This amount is still far short of the total expected cost of three AP1000s even taking into account lower labor costs and localization of non-nuclear systems and components. Poland has said it will seek commercial investors for the rest.
Poland’s government bond ratings are stable in the “A” range and the country is expected to be able to seek some funding from the European Union.
In April 2023 the US government offered to lend Poland up to $4 billion to build small modular reactors but has not separately made an offer for loans for other of the full-size reactor contracts
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