Agreement expected to clear hurdle for Korea to successfully ink contract for Czech nuclear power plant bid
Korea Hydro & Nuclear Power and Korea Electric Power Corp. have reached a settlement with Westinghouse, a US nuclear power firm, over an intellectual property dispute, bolstering the group's chances to successfully secure a contract with the Czech Republic to build two nuclear reactors there.
According to the two Korean state-run energy companies on Friday, they decided to come to an agreement to dismiss all current legal actions and strengthen cooperation in the global nuclear power market moving forward.
“This settlement will serve as a chance for KHNP and Westinghouse to establish a closer partnership,” said Whang Joo-ho, president of KHNP.
The dispute occurred when Westinghouse claimed that KHNP’s nuclear plant designs utilized its Washington-licensed technology after KHNP was selected as the preferred bidder for the Czech Republic’s $17 billion project to build two new nuclear reactors in Dukovany in July last year. The US company challenged that the Korean power agency needs its permission to export the nuclear reactors.
“The two sides restored their traditional 50-year ties through this agreement,” said Kim Dong-cheol, CEO of Kepco. “Based on this, Kepco can now take part in securing overseas nuclear power plant contracts more actively as the settlement resolves uncertainties due to legal conflicts.”
As Korea is expected to finalize the contract with the Czech Republic in March this year, the settlement has clears an important hurdle.
Westinghouse stated that the agreement allows both parties to move forward with certainty in the pursuit and deployment of new nuclear reactors.
“Westinghouse is pleased to reach an agreement with Kepco and KHNP on this important issue,” said Westinghouse CEO Patrick Fragman. “As the world demands more firm baseload power, we look forward to opportunities for cooperation to deploy nuclear power at even greater scale.”
The settlement announcement came about a week after Seoul and Washington signed a memorandum of understanding on principles over nuclear exports and cooperation as the two countries agreed to maximize the peaceful use of nuclear energy.
Korea’s Industry Minister Ahn Duk-geun welcomed the end of the dispute, expressing hopes that the two sides will actively collaborate in the global nuclear power sector in the future.
“Today’s agreement between Westinghouse and the Republic of Korea companies Kepco and KHNP marks an exceptional accomplishment, which could pave the way for hundreds of billions of dollars in cooperative projects moving forward while creating and maintaining hundreds of thousands of jobs in the civil nuclear sector,” said US Secretary of Energy Jennifer Granholm, referring to South Korea's formal name.
“US and Republic of Korea cooperation on civil nuclear energy can offer a highly competitive alternative on the global marketplace while upholding the highest nonproliferation standards.”
Although details of the settlement remain undisclosed as the involved parties agreed to keep them confidential, stakeholders in the nuclear energy sector believe the Korean side is likely to have given certain benefits to Westinghouse to settle the dispute.
“(KHNP) could be giving subcontracts or paying royalties (to Westinghouse) and that is why Westinghouse brought up legal conflicts in the first place,” said an official working in the nuclear energy industry.
“It is probably not a bad deal because Korea wants to seize more nuclear power plant contracts with rising demand for electricity worldwide. If Korea did not resolve this issue, it could have faced similiar hurdles when attempting to export nuclear power reactors to other countries.”
