KHNP in joint venture talks with Westinghouse to target US nuclear market

South Korea's state-run Korea Hydro & Nuclear Power Co. (KHNP) is in talks with Westinghouse Electric Co. to form a joint venture (JV) with an aim to enter the US nuclear market as the Trump administration ramps up efforts to quadruple the country’s nuclear power capacity.

The move comes after South Korea clinched a 26 trillion won ($18.6 billion) contract in June to build two nuclear power reactors in the Czech Republic, following the resolution of their long-running dispute over nuclear technology rights.

Their JV talks are expected to gain momentum when South Korean President Lee Jae Myung meets with US counterpart Donald Trump in their Aug. 25 summit, where nuclear cooperation is likely to be on the agenda.

“The two countries are expected to discuss ways to cooperate on nuclear power, including building nuclear power plants in the US either before or after the summit,” a Democratic Party lawmaker on the National Assembly’s SME and startup committee told The Korea Economic Daily on Wednesday.

“For Westinghouse, a partnership would improve its chances of winning US government nuclear contracts by working with South Korean companies that have the engineering, maintenance and repair capabilities needed for such projects.”

Details about the ownership structure of their JV and the timing of its launch are still under negotiation.

NUCLEAR RENAISSANCE

South Korean lawmakers and nuclear industry officials said the nuclear industry could become the next area of their cooperation after shipbuilding. Seoul's pledge to help rejuvenate the US shipbuilding sector was central to the tariff deal reached with Washington in July.

Alongside the so-called Make America Shipbuilding Great Again (MASGA) project, Trump issued four executive orders in May, aimed at revitalizing the US nuclear industry, which he calls a “nuclear renaissance.”

The executive orders include building 10 new large reactors with complete designs under construction by 2030 to expand the country’s nuclear energy capacity from around 100GW currently to 400 GW by 2050.

South Korean nuclear officials said that a partnership between KHNP and Westinghouse would be a win-win strategy.

Westinghouse owns the intellectual property for core nuclear power technology, but lacks engineering capacity. It would be advantageous to partner with South Korea not only in the US, but also in Europe and other countries, they said.

The two companies had long competed for a nuclear plant contract in the Czech Republic, along with France's EDF.

In 2022, Westinghouse sued KHNP in a US federal court, alleging intellectual property infringement. In 2024, KHNP was named as the preferred bidder for the deal.

Before finalizing the 26-trillion-won nuclear deal with the Czech Republic in May, KHNP entered into an agreement with Westinghouse to resolve their protracted row.

Forming a JV was not part of their settlement agreement, which drew a strong backlash from South Korean political circles.

The ruling Democratic Party criticized the deal, signed under the previous administration, arguing Seoul made significant concessions to secure the Czech nuclear deal.

Under the terms of the agreement with Westinghouse, South Korea is barred from bidding on nuclear power reactors in the European Union, except in the Czech Republic, as well as in North America and Japan.

Additionally, South Korea must guarantee the purchase of goods and services worth $650 million from Westinghouse per reactor, along with $175 million in royalties, when exporting nuclear plants.

KHNP and its parent KEPCO are required to issue a letter of credit worth $400 million per reactor, while KHNP must verify that the technology is its own when exporting SMRs.

Further, a senior South Korean nuclear industry official added that South Korea needs to win approval from the US government to enter the large-size nuclear power market, unlike small modular reactors (SMRs).

However, nuclear industry officials said South Korea would be an ideal partner for Westinghouse and that resolving their conflict would provide Seoul a leg up to expand into the US nuclear market.

“In the world, it’s only EDF and KHNP that can oversee the entire process of nuclear plant from design and construction to test operations, management, maintenance and repair,” said Chung Dong-Wook of energy system engineering at Chung-Ang University.

Write to Hyun-Woo Kang, Ri-Ahn Lee and Ji-Eun Ha at hkang@hankyung.com
 

Yeonhee Kim edited this article.