SEOUL/PARIS The commercial start-up of the first of four nuclear reactors that South Korea's KEPCO is building in United Arab Emirates is set to be delayed because the local operating company is not ready to run the reactors, a nuclear industry source said.
Barakah is one of the world's few major nuclear new build contracts, which Korea Electric Power Corporation(KEPCO) (015760.KS) won in 2009, beating a rival consortium led by more established French reactor maker Areva (AREVA.PA) (EDF.PA).
Since then, the four reactors have been built on time and on schedule, a rare feat in a nuclear industry plagued by cost overruns and multi-year delays, with the first of the four on scheduled to be completed this month.
But a source familiar with the situation said that Nawah - the joint venture between the Emirates Nuclear Energy Corporation (ENEC) and KEPCO that will operate the plant - is struggling to get an operating licence, which could delay the start-up of the first plant by several months, possibly to the end of this year.
When the deal was negotiated in 2008-09, the APR1400 reactor model that KEPCO offered in Abu Dhabi existed on paper, but the first model of the new series was set to go online at South Korea's Shin Kori nuclear station in 2013, well ahead of the planned startup of the Barakah station in UAE in 2017.
This would have given Nawah a few years to monitor the Korean plant, start training staff and getting a licence. But construction of Shin Kori No.3 reactor was delayed three years due to a safety scandal in late 2012, and the reactor only became operational in December 2016.
A source with direct knowledge of the situation told Reuters that because of the delay on Shin Kori No.3, UAE nuclear regulator FANR was not ready to give Nawah its operating licence and wanted to postpone this "regardless of the construction schedule."
"It's like you have ordered 100 cars to start a taxi company and all of them were delivered to you but the problem is you are not fully ready just because your drivers-to-be and engineers don't have a licence to operate and maintain," the source said.
Low oil prices are also making the start-up of the plant less urgent from the UAE perspective, the source added.
ENEC and Nawah did not respond to several requests for comment. KEPCO declined to comment.
A second source in the nuclear industry who is not directly involved in the Barakah project, said nuclear fuel had been shipped to UAE but was not being loaded into the reactor as Nawah does not yet have a licence.
For years, Nawah has been training staff in power plant operation, but to get an operating licence it needs to demonstrate it has the necessary management skills and can master all the systems needed to operate the reactors.
"It is not a simple undertaking. There will be some Korean staff, but they can only be in the back seat, not the front seat. The reactor has to be operated by the licensee's staff," the industry source said.
For KEPCO, a delay of the project increases its indirect costs, as it will force it to keep its staff of about 21,000 in the UAE for longer, the first source said.
Following Nawah's first board meeting on Tuesday, acting CEO Mohammed Sahoo AlSuwaidi said in a statement the company fully recognises the challenges ahead.
"We are focussed on achieving operational readiness in line with the expectations of our regulator FANR," he said.
He said with the support of KEPCO's experts, Nawah will train UAE nationals to be future operators of the plant and from 2020 onwards Nawah will fully operate the four nuclear reactors.
(Reporting by Jane Chung in Seoul, Geert De Clercq in Paris and Stanley Carvalho in Abu Dhabi; Writing by Geert De Clercq, editing by David Evans)