Major Corporations Entering SMR: "Introduce PPA and Reflect in the 12th Basic Electricity Plan"

Policy Forum on Building a Private Sector-Led SMR Business Model Held
Presentations by GS Energy, SK Innovation, POSCO, and Others
"Early Establishment of Revenue Structure Is Essential"
"Repurposing Coal Plant Sites Is a Realistic Approach"

Shim Hyungjin, director of the Nuclear Policy Center at Seoul National University, is delivering a greeting at the "Policy Discussion for Establishing a Private-led SMR Business Model" held on the 1st. Photo by Heejong Kang

As private companies are increasingly turning their attention to the small modular reactor (SMR) business, experts emphasize that it is necessary to enhance business predictability to facilitate actual investments. They also suggested that discussions should now be launched in earnest on enabling private sector participation in the nuclear power industry, which has traditionally been led by the public sector.

At the "Policy Forum for Building a Private Sector-Led SMR Business Model," co-hosted by the Nuclear Policy Center at Seoul National University and GS Energy at Seoul National University on September 1, Kim Jungwook, Head of the SMR Business Team at GS Energy, highlighted the need to resolve uncertainties in the SMR business involving reactor types and technology, revenue, community acceptance, and systems and regulations as key tasks for private SMR projects.

Kim especially stressed that "to enable private sector investment and project financing, a structure that allows for the prediction of operational revenues, such as a power purchase agreement (PPA) or system marginal price (SMP), must be established early on. It is also necessary to reflect private sector intentions for SMR construction in the 12th Basic Electricity Supply and Demand Plan to send a clear investment signal to the market." He proposed the "Coal-to-SMR" model, which repurposes existing sites and transmission systems of outdated coal-fired power plants, as a realistic business approach.

GS Energy holds exclusive domestic business rights by investing equity in NuScale Power in the United States. Kim explained, "For NuScale SMRs, the domestic business will proceed after the overseas SMR constructions get underway," and added, "We are also considering participation in the commercialization of innovative domestic small modular reactors (i-SMRs)." GS Energy is also reviewing opportunities in micro modular reactor (MMR) projects, which are even smaller in scale than SMRs.

On the 1st, attendees are taking a commemorative photo at the "Policy Discussion for Establishing a Private-led SMR Business Model" held at Seoul National University. Photo by Heejong Kang

SK Innovation, which has invested in US-based TerraPower, is considering entering the domestic market by utilizing the Nuclear Safety and Security Commission's preliminary design review system, scheduled to be introduced in November. You Hyanggeun, Team Leader of the Energy Solution Division at SK Innovation, put forward a Korea-US collaboration model that combines next-generation reactor technology and policy capabilities from the US with Korea's competitiveness in nuclear equipment manufacturing, EPC, and operations.

You explained that successful commercialization of SMRs would require not only securing economic feasibility through long-term PPAs but also improving the licensing system and achieving social acceptance.

POSCO Holdings presented a case for large-scale demand for carbon-free power as required for carbon neutrality in the steel industry and conversion to hydrogen-reduced steelmaking. Yuk Jinseong, Head of Strategic Energy Business at POSCO Holdings, stated, "If we assume a hydrogen-reduced steelmaking facility with a production capacity of 2 to 2.5 million tons per year, approximately 1.7 GW of power would be needed for hydrogen production and operation of the electric furnace," thereby demonstrating the potential for stable power supply through SMRs.

He also emphasized the need for permitting SMR PPAs, securing flexibility in designating distributed energy zones, and sharing risk between public and private stakeholders. Yuk explained, "Ultimately, the goal is for us to achieve self-generation using SMRs."

Academia highlighted the necessity for policy support in the public domain, where it is difficult for private companies to act alone.

Jang Moonhee, Research Fellow at the Nuclear Policy Center at Seoul National University, pointed out risks such as fuel supply, spent nuclear fuel management, nuclear damage compensation, and licensing. She suggested phased business models such as establishing special purpose companies (SPCs) jointly operated by public enterprises with nuclear power operation experience and private firms, as well as government participation in institutional risk-sharing.

Oh Seungjong, Senior Researcher at Seoul National University, suggested the possibility of using SMRs for process heat supply in industries where decarbonization is difficult with electrification alone, such as steel, petrochemicals, and refining. He stressed the need for demand surveys of process heat by industrial complex, technical and economic assessments, public-private joint demonstrations, and related system improvements.

Shim Hyungjin, Director of the Nuclear Policy Center at Seoul National University, argued, "We must shift from a structure where the public sector shoulders everything to a private sector-driven policy. To bring the private sector in as nuclear power operators, a wide range of discussions should begin on legislation, revenue structures, and the roles of both the public and private sectors."

This content was produced with the assistance of AI translation services.