Kepco is unlikely to be tempted into taking over the troubled Moorside nuclear project without some sort of public financing, a former energy minister has told Utility Week.
The South Korean state-owned utility will also be hesitant to step in and save the development unless it can use its own reactor technology.
“They’d want a signal about financing from the government,” said chairman of New Nuclear Watch Europe, Tim Yeo. “I’ve been arguing for some time that we should look at providing during the construction phase some government finance.”
Yeo said this would have to be on the basis of repayments beginning as soon as the plant is generating.
“But I think they would be looking for something,” he added. “It doesn’t have to be the whole amount by any means.”
Questions have been left over the future of Moorside after Engie revealed it will offload its 40 per cent stake in the project to development partner Toshiba. Yeo said the plant is now “approaching a crisis”.
Toshiba bought a 60 per cent stake in the development consortium NuGen in 2014, including 10 per cent which it acquired from Engie. As part of the purchase agreement, Engie retained the right to transfer its share to Toshiba in the event of a default.
Engie decided to invoke that right earlier this week after Toshiba’s subsidiary Westinghouse – which was due to provide three of its AP1000 reactors for the project – filed for bankruptcy protection in the US. Cash-strapped Toshiba has also said it wants to sell its stake in the project once the plant is built but plans to take no role in construction.
Yeo said Kepco is unlikely to be keen on using Westinghouse’s reactors. “I don’t think they’re terribly interested in taking it over and just using the AP1000. I think they would do it if they had the chance to use their own technology.”
This would mean a delay whilst Kepco’s reactor design underwent a generic design assessment – a process which usually takes around four years according to the Office for Nuclear Regulation.
However, Yeo said the involvement of Kepco should not be dismissed on this basis. “At the present rate of progress there’s no certainty about the timetable for Moorside with all these uncertainties hanging around.
“We know that Kepco have built in [the United Arab Emirates] more or less to time. We would still have something which is capable of being onstream by the end of the 2020s and I don’t think that’s all that much longer than we’re going to take at the moment.”
Kepco otherwise appear to be “quite keen” on the project, he said. “I think they see it’s a rather practical opportunity to get into the UK market. If they could their technology approved for use in the UK, that would be a useful imprimatur for other markets.”
Their involvement should also be attractive to the UK, Yeo added. “Kepco are established: They’ve built this stuff… They’ve built it to time. We believe they’ve built it more or less to budget in the UAE so they are probably as good as partner for this project as we could find.”
He said there don’t appear to be any other “runners and riders” about at the moment. “The Chinese are focused on getting Hualong One through the GDA process and then eventually being able to use the site at Bradwell… The political issues relating to Rosatom, who’ve also got in my view a competitive technology, are probably still a barrier.”
When asked whether project was likely to continue without the backing of Kepco, he responded: “I don’t know.”
“I wouldn’t like to base my policy on how the UK is going to meet its electricity needs in the 2030s on the assumption that it will move ahead.”
Business, energy and industrial strategy secretary (BEIS) Greg Clark is understood to have met with representatives with Kepco during a visit to Seoul this week to discuss their possible involvement in the project.
Labour’s shadow BEIS secretary Rebecca Long-Bailey and the GMB union, which represents workers in the nuclear industry, have both demanded that the government take action to save Moorside from collapse.