South Korea Approves First New Reactors Since Fukushima

South Korea approved construction of two nuclear reactors worth a combined 7.62 trillion won ($7.1 billion), the country’s first since a domestic scandal over faked safety documents and the Fukushima disaster in Japan.

Construction of the Shin-Kori No. 5 and No. 6 reactors, both 1,400 megawatts, will begin in September and is expected to be completed by December 2020, the energy ministry said in an e-mailed statement. South Korea currently has 23 reactors with plans to build another 11, including five already under construction and the two announced today.

Today’s approvals are also the first since the government released its long-term energy plan this month to raise South Korea’s nuclear reliance to 29 percent of generation capacity by 2035, from 26 percent at the end of 2012. An investigation into substandard components led to the shutdown of two reactors in May, exacerbating the regular power shortages in South Korea caused by surging demand and insufficient supply.

“South Korea will have 11 more reactors by 2027, but we’ll eventually have to build more to satisfy surging power demand,” Kang Seung Jin, a professor of knowledge-based technology and energy at Korea Polytechnic University, said by phone. “We are continuously relying more on nuclear energy because it’s widely accepted as the most economical source of energy.”

President Park Geun Hye’s government has promised tighter regulation of the nuclear industry to boost public confidence in nuclear power following the safety scandal, in which 100 officials were indicted on corruption and bribery charges. It also cost Kim Kyun Seop his job as head of state-run Korea Hydro & Nuclear Power Co., operator of the country’s reactors.

Nuclear Opponents

Sixty-three percent of respondents to a March survey by Hangil Research said they consider domestic reactors unsafe.

The government’s 29 percent target for nuclear reliance, while lower than the previous 41 percent goal, represents the upper-end of a 22 percent to 29 percent range recommended by an energy ministry working group in October, which took into account public opposition to nuclear power.

“To switch our reliance to renewable energy, we would have to raise power prices and Koreans of course won’t like that idea,” said Kang at Korea Polytechnic University, who was also a member of the energy ministry working group.

South Korea consumes power at almost twice the average of countries in the Organisation for Economic Co-operation and Development relative to the size of its economy, according to the Hyundai Research Institute in Seoul. Demand has grown to “an excessive level” with supply failing to keep pace, Hyundai Research said in June.

‘Inevitable Choice’

When former President Lee Myung Bak in 2008 said nuclear plants would supply 59 percent of the nation’s power by 2030 from 36 percent, his administration called it “an inevitable choice” in the face of high oil prices and to reduce emissions.

Korea Hydro, whose parent is South Korea’s monopoly electricity distributer Korea Electric Power Corp., applied for approval to build Shin-Kori No. 5 and No. 6 in 2012. They’re the first to receive approval since the Fukushima disaster in March 2011, according to a Korea Hydro spokesman, who asked not to be named citing company policy.

Similarly to Japan, South Korea began building nuclear plants to provide a stable source of energy to spur economic growth and reduce reliance on imports of oil and coal. The current president’s father, the military ruler Park Chung Hee, commissioned the first reactor Kori No. 1, which began operations in 1978.

Before it's here, it's on the Bloomberg Terminal.