[Why&Next] For US Investment Projects 1 and 2, Gas Turbines and Nuclear Power: Real Benefits Lie in Securing EPC, Operations, and Equity

Gas Turbine Orders Could Reach Up to 4 Trillion Won

Securing APR1400, Design, Procurement, and Construction Is Key

Long-Term Profits Depend on Operations and Equity Participation

As the $350 billion investment projects in the United States become more tangible, centered around gas combined cycle power plants and nuclear power generation, attention is shifting toward the tangible benefits to be secured by Korean companies. Experts point out that large-scale investments can only lead to sustainable, long-term profits if domestic firms participate not only in simple equipment supply but also in engineering, procurement, and construction (EPC), operations and maintenance, and even equity investments.

A 380MW-class gas turbine from Doosan Enerbility undergoing a full-load performance test. Photo by Yonhap News

According to the industry on September 8, Doosan Enerbility—which has established a full-cycle business system for large gas turbines—is considered the leading candidate to benefit from the Encinal combined cycle power plant project in Texas. Korea Investment & Securities forecasts demand for an initial four units, and a total of 12 to 14 units of 380MW-class gas turbines. The total supply value may reach up to 2.8 trillion won, and as much as 3 to 4 trillion won when including steam turbines and generators.

Achieving large-scale supply records in the United States holds significance as well. In the world’s largest gas turbine market—long dominated by global companies such as GE—the Encinal project could provide a foothold for entering new power plant construction, replacement of aging facilities, and the long-term maintenance market. Even after operations begin, continuous maintenance and parts replacement demand can be expected, creating stable revenue streams.

However, the actual benefits for Korean firms will vary depending on the scope of their participation. If their involvement is limited only to supplying core equipment, the benefits returning to Korea could remain restricted. It is necessary to secure orders that cover power plant design and construction, as well as long-term service, and lead the overseas expansion of small and medium-sized partner companies. In nuclear power projects, sharing financial and construction risks is crucial. With extended project durations, costs surge sharply if permits and construction are delayed. If domestic firms are left to shoulder losses from increased construction costs and scheduling delays, winning such orders could become a burden instead. Thus, investment safeguards—like power purchase agreements and loan guarantees—must be arranged. One alternative being discussed is a division of roles in which the U.S. side manages site provision, permitting, power sales, and financing, while Korean companies take on equipment manufacturing, construction, operation, and maintenance.

Kim Jung-kwan, Minister of Trade, Industry and Energy, is departing for the United States through Terminal 2 departure hall at Incheon International Airport on September 1. Photo by Yonhap News Agency

Forming a consortium anchored by Korea Hydro & Nuclear Power and Westinghouse, together with Doosan Enerbility, Korean construction companies, and nuclear component firms, is also under consideration. Instead of Korean firms joining individually as subcontractors, a ‘Team Korea’ approach—jointly securing project shares and EPC volumes—would strengthen negotiating power and spread profits more widely throughout the local industry. The type of nuclear reactor and operational authority are also critical negotiation points. If the Korean-designed APR1400 nuclear reactor is included in the project, the domestic nuclear power ecosystem can broadly participate in design, equipment manufacturing, and construction. If equity in operations after completion is also secured, Korean companies would have a leading stake in long-term follow-up markets such as maintenance, fuel, and component replacement.

Professor Jo Hongjong of Dankook University noted, "Because the United States has not built nuclear plants or produced main equipment for 30 years, chances are high that Korean companies will be responsible for these aspects. It is important to create channels where domestic companies can participate and share in profits, and, if possible, have a process that allows them to be involved all the way through EPC."

Professor Jung Yonghoon of KAIST stated, "The APR1400, the Korean reactor model, must be included when constructing new nuclear power plants as part of this U.S. investment. Negotiations should ensure that not only construction, but also explicit equity participation of our companies in up to 80 years of subsequent operation is guaranteed."

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