"Korean Nuclear Power Competitiveness at 65% Compared to Pre-Phase-Out Era"

FKCCI "Restoration of Existing Nuclear Power Ecosystem Takes About 3.9 Years"

[Asia Economy Reporter Park Sun-mi] It has been argued that the competitiveness of the domestic nuclear power industry has significantly deteriorated compared to before the nuclear phase-out policy, and that rapid supply of work orders and alleviation of financial burdens are necessary to revitalize the nuclear power industry.

On the 25th, the Federation of Korean Industries conducted a survey of 70 major nuclear power companies, revealing that the competitiveness of the domestic nuclear power industry is at about 65% compared to before the nuclear phase-out. More than half (51.6%) of the responding companies, based on the number of companies, reported that the competitiveness of the nuclear power industry has declined by 30-40% compared to before the phase-out. This was followed by a 20-30% decline (22.6%), 10-20% decline (6.5%), and others (19.4%).

Companies forecast that it will take approximately 3.9 years to restore the existing nuclear power ecosystem. Based on the number of companies, 51.6% of respondents said it would take 2 to 4 years to recover the nuclear ecosystem, followed by 4 to less than 6 years (38.7%), 6 to less than 8 years (6.5%), and less than 2 years (3.2%).

The nuclear power industry cited shortages of skilled personnel (35.7%) and operating funds (30.4%) as major difficulties. According to the Korea Nuclear Industry Association, the number of students enrolled in nuclear-related departments last year was 2,165, a 22.0% decrease compared to 2017 (2,777). Company A expressed difficulties, stating, “With the recent resignation of experienced employees and the reduction of related departments, it is difficult to recruit new employees, causing a shortage of personnel.”

The areas most affected by the nuclear phase-out policy were ▲ deterioration of profitability due to reduced business viability (54.8%), ▲ weakening of expertise due to personnel outflow (29.0%), ▲ suspension of research and development (R&D) and decline in technological level (9.7%), and ▲ deterioration of value chain competitiveness (3.2%), in that order.

In this regard, the Federation of Korean Industries argued that it is urgent to prepare incentives for workforce expansion, such as expanding subsidies for new hires. Furthermore, considering the expected ongoing economic downturn and rising interest rates, they emphasized that financial support such as low-interest loans and alleviation of interest cost burdens should be provided to help the nuclear industry overcome the crisis and resume investment.

Companies identified “rapid supply of work orders” as the most urgent task for restoring the nuclear ecosystem (46.9%). A nuclear industry official stated, “Although the resumption of construction for Shinhanul Units 3 and 4 has been confirmed, it will take 2 to 3 years for the effects to spread through the value chain via actual orders,” adding, “Work orders must be supplied quickly to the nuclear industry by expediting the resumption of construction for Shinhanul Units 3 and 4 through simplification of environmental impact assessment procedures.” Other necessary measures included improvement of permits and regulations related to nuclear construction (28.1%), alleviation of financial burdens (17.2%), and support for marginal companies (7.8%).

A Federation of Korean Industries official explained, “Since nuclear power was classified as an eco-friendly energy source in the European Union (EU) taxonomy last July, it is expected that nuclear power will also be included as eco-friendly energy in the Korean version of the K-taxonomy,” adding, “As global nuclear industry growth is expected to be high in the future, creating many export opportunities, it is urgent to restore the nuclear ecosystem through active government support.”