June 12, 2015 / 6:47 AM / in 5 years

UPDATE 2-S.Korea panel backs closure of oldest nuclear reactor

* Decision expected to lead to shutdown of 40-year-old plant

* Application deadline to extend lifespan is June 18, 2015

* KHNP says no decision has yet been made

* Panel hopes closure to build decommissioning technology (Adds more quote and details)

By Meeyoung Cho

SEOUL, June 12 (Reuters) - South Korea is expected to shut down its oldest nuclear reactor, the Kori No. 1 unit on the country’s southeastern tip, after a government-led energy advisory panel recommended it be permanently closed.

The panel’s decision meant operator Korea Hydro & Nuclear Power Co Ltd (KHNP) was unlikely to seek a second extension for the nearly 40-year-old plant, whose operating permit expires in June 2017, government and industry sources said.

“The energy committee concluded today that the permanent closure of Kori No.1 is desirable for the mid- and long-term development of our nuclear power industry,” Yoon Sang-jick, the committee head and minister of trade, industry and energy, told reporters.

A shutdown would mark the first permanent closure of a plant in South Korea since the country launched its nuclear industry nearly four decades ago.

Public trust in nuclear energy in the world’s fifth-biggest user of nuclear power has been undermined by a 2012 scandal over the supply of reactor parts with fake security certificates and the 2011 Fukushima crisis in Japan.

But Seoul still plans to open more reactors, taking the total to 36 by 2029 from 23 at present, which account for about a third of the country’s electricity needs.

The 587-Megawatt (MW) Kori No.1 unit makes up around 0.5 percent of South Korea’s total power generating capacity, according to the ministry data.

KHNP, part of state-run utility Korea Electric Power Corp (KEPCO), has until June 18 to apply for an extension of the Kori No. 1 permit, which has already been extended once by 10 years to 40 years.

“Nothing has been decided until our executive meeting is held some time next week,” a company spokesman said.

AIMING AT DECOMMISSIONING MARKETS

The advisory panel’s recommendation was also aimed at building South Korea’s decommissioning technology, which is behind that of developed countries, according to experts.

“The decision was made to develop decommissioning technology and preemptively for us to get ready before the world’s decommissioning markets are open wider,” Park Joo-heon, a member of the energy panel and president of public think tank Korea Energy Economics Institute (KEEI), told Reuters by phone.

Park noted that KEEI’s data showed around 400 nuclear plants would be decommissioned globally by 2050, a market worth 300 trillion Korean won ($268.71 billion).

South Korea has been working to expand its nuclear power exports since KEPCO won a contract from the United Arab Emirates in 2009 to build four nuclear reactors. This year South Korea and Saudi Arabia also signed a memorandum of understanding to cooperate on the development of nuclear energy.

$1 = 1,116.44 won Reporting by Meeyoung Cho; Editing by Richard Pullin and Tom Hogue

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