First Steps in U.S. Investment: Benefits for Korean Power Companies Depend on Follow-Up Negotiations

Scope of Equipment and Parts Supply Is Key

Profitability Must Be Ensured Through PPAs

To ensure that investment projects in the United States lead to orders for domestic companies, securing the scope of supply for equipment and parts used in power plant construction is key. There are also calls to establish long-term power purchase agreements (PPAs) and ensure licensing and grid connection conditions so that investors can recoup their capital after the power plant begins operating.

As of September 23, according to industry sources, with the government all but finalizing its investment projects in the U.S., the industrial sector is hopeful that opportunities to enter the American power infrastructure market will expand. Representative examples include the Encinal gas-fired combined cycle power plant in Texas, construction of large-scale nuclear power plants, and liquefied natural gas (LNG) development in Alaska. However, it is assessed that whether these projects translate into orders and profits for domestic firms will depend on the results of follow-up negotiations.

Kim Jungkwan, Minister of Trade, Industry and Energy, attended the plenary session of the Industry, Trade, Energy, Small and Medium Venture Business Committee held at the National Assembly on the 22nd, delivering a speech. On this day, Minister Kim reported the progress and detailed contents of the investment negotiations with the United States confidentially. 2026.09.22 Photo by Yoon Dongjoo

Among Korean companies, there are expectations that Doosan Enerbility will be in charge of supplying key gas turbine and nuclear power plant equipment. Doosan Enerbility manufactures gas turbines and steam turbines for power plants as well as nuclear steam generators. The company has already signed a gas turbine supply contract in the United States.

If the supply of equipment is confirmed, opportunities could also expand for domestic partner companies. Gas turbines produced by Doosan Enerbility contain about 44,000 parts, but only roughly 20% are manufactured in-house. The remainder is sourced from domestic and international partners. In Korea, there are 200 to 300 companies supplying materials, parts, and equipment for gas turbines, distributed across Busan, Ulsan, Gyeongnam, as well as the Gyeonggi and Jeolla regions.

An industry official commented, "The United States can be considered the original developer of gas turbines, so being able to export gas turbines to the United States through this opportunity would serve as a significant reference, much like Hyundai’s Pony entering the German automobile market."

Regarding the second phase project, the construction of eight large-scale nuclear power plants in the United States, the scope of participation by domestic companies has become a key issue. One option being discussed is to apply Westinghouse's AP1000 model for six units and Korea’s APR1400 model for the other two units. Since the U.S. leads the design of the AP1000, the actual benefits to domestic firms are likely to depend on the degree of participation in construction and the procurement of intermediates, parts, and equipment.

Tae-Hwang Kim, a professor in the Department of International Trade at Myongji University, stated, "Since the six U.S.-type nuclear power plants are being designed under American leadership, it will be important to see how much domestic companies can participate in supplying intermediates and parts during the construction process. If the Korean APR1400 had been used, there would have been more opportunities for domestic partner companies, but in the case of the U.S.-type model, the potential benefit may not meet expectations."

Junyoung Huh, Professor of Economics at Sogang University, also commented, "There is still room for negotiation in the details regarding the extent to which domestic companies can participate. In the upcoming negotiations, it will be essential to secure maximum participation opportunities for domestic firms."

"Recovering Investment and Securing Adequate Returns Is Just as Important as Scale or Speed"

After contracts are won, it is necessary to secure agreements and business conditions that ensure stable profits. Although this power generation project is structured to supply electricity to artificial intelligence (AI) data centers, it is reported that the local company with which to sign a PPA has yet to be determined.

Dae-Geun Cho, a senior advisor at Bae, Kim & Lee LLC, said, "Just as important as the scale and execution speed of investment is establishing a business structure that ensures capital recovery and a reasonable return. In response to investment demands, the U.S. side should support the signing of long-term PPAs and cooperate on needed regulatory improvements, licensing, and grid access conditions."

He added, "For projects requiring thorough verification of commercial viability, such as gas development in Alaska, strategic flexibility is needed in follow-up negotiations to secure buyers, share risks, and adjust investment conditions and timing. Achieving both contract fulfillment and profitability must be the goal of negotiations."

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