The South Korean government has postponed a report to the National Assembly regarding U.S. investment negotiations, raising concerns for Doosan Enerbility, which was expected to be a key beneficiary of these investments, particularly in large nuclear power projects.
On September 18, sources from the government and political circles indicated that the Ministry of Trade, Industry and Energy requested a delay in the scheduled report to the National Assembly. As a result, the announcement of the first major U.S. investment project, estimated at $200 billion (approximately 272 trillion won), which was anticipated for that day, is also expected to be postponed.
The delay in the National Assembly report and project announcement is reportedly due to disagreements over nuclear power initiatives between the U.S. and South Korea. South Korea proposed investing in the construction of eight large nuclear reactors in the U.S., suggesting that six would use the American Westinghouse AP1000 design and two would utilize the Team Korea APR1400 design.
However, the U.S. government and Westinghouse have expressed reservations about constructing the APR1400 in the U.S., leading to complications in negotiations. Although the APR1400 has passed design certification by the U.S. Nuclear Regulatory Commission (NRC), concerns arise that its approval could undermine the market position of the U.S.-made AP1000.
The APR1400 is a new model of pressurized water reactor developed by South Korean companies, including Doosan Enerbility, Korea Hydro & Nuclear Power, Korea Electric Power Technology, and Korea Nuclear Fuel. Doosan Enerbility is responsible for manufacturing key components such as the reactor pressure vessel and steam generators, making it a crucial player in the U.S. nuclear market alongside small modular reactors (SMRs).
Despite the potential setback for the APR1400's entry into the U.S. market, analysts believe it may not significantly harm Doosan Enerbility, unlike other South Korean firms. The company has already been confirmed as a supplier of key components for the Westinghouse AP1000 and is in the contract execution phase. However, unlike the APR1400, which has project leadership within Team Korea, the AP1000 carries greater risks due to its contractual relationship with Westinghouse and potential changes in supply chain strategy.
If the U.S. nuclear investment is finalized, it is expected to enhance production capacity, adding U.S. nuclear projects to existing large-scale projects like the Dukovany 5 and 6 in the Czech Republic and the Yeongdeok 2 reactors. Currently, Doosan Enerbility's production capacity for large nuclear components is reported to be around two units per year.
Jung Bum-jin, a professor of nuclear engineering at Kyung Hee University, stated, "Given the disruption in the U.S. nuclear supply chain, a policy prioritizing domestic components is unlikely to succeed. South Korea has no reason to rush into concessions, and I hope the government will negotiate firmly in favor of Korean companies."
In contrast, the first major investment project in the U.S., the Encinada gas combined cycle power plant in Texas, is expected to proceed smoothly due to minimal disagreements between South Korea and the U.S. regarding the expansion of artificial intelligence data centers (AI DC). It is anticipated that the project will be confirmed according to South Korea's proposals, with Doosan Enerbility expected to play a key role as a supplier of gas turbines.
While the U.S. may request that American companies like GE Vernova participate in the supply chain, the current demand for gas turbines driven by the AI DC supercycle suggests that major gas turbine manufacturers are already overwhelmed with private sector orders, making it unlikely that they will insist on using U.S.-made components.
* This article has been translated by AI.
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