SEOUL (Reuters) - South Korean public support for nuclear power on Friday sucker punched a government policy to steer the country away from nuclear-generated electricity as Seoul said it would bow to a demand to resume construction of two new reactors.
President Moon Jae-in came to power in May, after running on a ticket that called for reducing South Korea’s nuclear and coal-fired power generation in a push to use more natural gas and renewables.
Those plans were dealt an unlooked-for blow on Friday when a public opinion survey found a majority of almost 60 percent in favour of resuming the stalled construction of two reactors.
Building the two reactors could mean reversal of a strategy to slowly reduce nuclear energy’s share of the power mix, and also significantly eat into the liquefied natural gas (LNG) demand of the world’s second-largest consumer of the fuel.
“Our recommendation to the government is restarting construction,” said Kim Ji-hyung, chairman of a government-organised committee to study the nuclear projects.
“Our final public opinion survey showed 59.5 percent of (responding) South Koreans chose to resume the construction,” Kim told a news conference.
Stability of power supply was cited as a primary reason for the choice in survey responses, the committee said.
“We respect the will of the committee,” said South Korea’s presidential office spokesman Park Soo-hyun.
An expert at a government think tank said the size of the win in favour of the projects meant the government had no choice but to go with the committee’s recommendation.
“The outcome was very unexpected ... Many expected the difference would be a maximum 10 percentage points, but as it turned out, it stood nearly at 20,” said Roh Dong-seok, senior
research fellow at the Korea Energy Economics Institute.
The two 1,400-megawatt (MW) reactors - Shin Kori No.5 and Shin Kori No.6 - were originally to be completed by March 2021 and March 2022, respectively, in the southeastern city of Ulsan.
The government announced a suspension of the projects after coming to power, saying it would consult the public over their future.
The committee conducted four rounds of surveys, including phone interviews of 20,006 people and public discussions involving some 470 citizens, over the past three months.
With the reactors now likely going ahead, completion dates are set for October 2021 and October 2022, according to state-run nuclear operator Korea Hydro & Nuclear Power [KRHYDR.UL].
(For a graphic on 'South Korea 2016 power generation mix' click reut.rs/2xTOZKB)
Shares of Korea Electric Power Corp rose 0.6 percent to 41,110 won ($36.32) on Friday, after jumping nearly 6 percent following the announcement of the survey results.
KEPCO Engineering & Construction, in charge of the reactors’ design, lost 1.2 percent after surging as much as 20 percent. KEPCO Plant Service & Engineering gained 1.7 percent.
Building nuclear power plants takes years, so the decision in favour of the two new reactors will not change South Korea’s immediate fuel demand patterns.
But the vote, which surprised many in the industry, does impact the long-term outlook for the country’s fuel consumption, with the biggest impact likely falling on imports of LNG.
“Full implementation of Moon’s election promises could have resulted in around 10 million tonnes (a year) of extra LNG demand by 2030. This now seems unlikely,” said Kiah Wei Giam, principal analyst at energy consultancy Wood Mackenzie.
That compares to South Korea’s LNG imports of 33.4 million tonnes last year, according to customs data. [LNG/KRTRD]
Giam said, however, the survey did not totally derail the government’s energy policies.
“With the planned nuclear phase-out delayed, it will be interesting to see whether more aggressive anti-coal policies are enacted,” Giam said.
Park Won-joo, Deputy Minister for Energy & Resources, said later at a briefing the government will reach a final decision on the nuclear reactors next Tuesday and then tell the state-run nuclear operator when to resume project construction.
Reporting by Jane Chung; Addiontal reporting by Dahee Kim and Haejin Choi; Editing by Henning Gloystein and Tom Hogue