[2020 National Audit] Ruling Party: "Board of Audit Confuses Economic and Financial Feasibility of Wolseong Unit 1" Government: "Board of Audit Did Not Accept"

National Audit of the Mountainous Area on the 22nd

Sung Yun-mo, Minister of Trade, Industry and Energy (right), attends the comprehensive audit of the Ministry of Trade, Industry and Energy held on the 22nd at the National Assembly in Yeouido, Seoul, responding to questions from lawmakers. On the left is Jung Seung-il, Vice Minister of Trade, Industry and Energy. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] "What economists find most shocking about the Board of Audit and Inspection's decision is the confusion between the 'economic feasibility evaluation and financial feasibility evaluation' of the continued operation of Wolseong Unit 1. Economic feasibility represents the costs and benefits at the national level, while financial feasibility shows the cash flow pocket of an individual company." (Lee Soyoung, Democratic Party of Korea lawmaker)

"When the government made the policy decision (early shutdown) regarding Wolseong Unit 1, it was a decision made by considering economic feasibility, acceptability, and safety, and I proposed that acceptability and safety should be included in the economic feasibility evaluation, but I regret that this was not accepted by the Board of Audit and Inspection." (Sung Yunmo, Minister of Trade, Industry and Energy)

On the 22nd, at the National Assembly's Trade, Industry, Energy, Small and Medium Business Committee, ruling party lawmakers and the Ministry of Trade, Industry and Energy made remarks suggesting there were blind spots in the Board of Audit and Inspection's economic feasibility evaluation process of Wolseong Unit 1.

Lawmaker Lee criticized the premises and issues set by the Board of Audit and Inspection regarding the early shutdown of Wolseong Unit 1 point by point.

He stated that ▲ to maintain safety during continued operation of the nuclear power plant, trillions of won had to be spent to apply the latest technical standards (R-7), ▲ there were defects such as damage to the reactor wall concrete and the nuclear fuel storage reservoir waterproof membrane, ▲ the temporary spent fuel storage facility was approaching saturation in March 2022, and ▲ it was difficult to discuss economic feasibility given that 800 billion won in repair costs were incurred during the 8 years it was not operated at all.

He also pointed out that ▲ economic feasibility without considering safety is meaningless (because maintaining safety such as R-7 costs more), ▲ both the Board of Audit and Inspection and Korea Hydro & Nuclear Power confused economic feasibility evaluation with financial feasibility evaluation, ▲ estimates of future revenue and costs inevitably vary by institution, and ▲ since continued operation lacked evaluation standards like the 'Standard Guidelines for Nuclear Power Economic Feasibility Evaluation' applied to new nuclear power plants, controversy was inevitable.

Minister Sung responded, "When the government made the policy decision (early shutdown) regarding Wolseong Unit 1, it was made by considering economic feasibility, acceptability, and safety as the lawmaker mentioned."

He added, "Regarding the economic feasibility evaluation by the Board of Audit and Inspection, the Ministry of Trade, Industry and Energy presented various opinions that should be considered, including national benefits and costs and economic feasibility evaluation beyond simple accounting issues, and I regret that these were not accepted."