Interview with KHNP President Jooho Whang | iRADIO

Did you manage to significantly reduce the price per block from the original offer? Does the discount correspond to the roughly 25 percent that Minister of Industry and Trade Jozef Síkela (STAN) talked about at the end of January?
I would like to ask for your understanding. The tender is still ongoing, so I cannot comment on any specific numbers and specific savings. Of course, it is logical that if we build four blocks instead of one, there are some economies of scale. Whether it is the actual design, purchase, construction or supply of components, where there are various synergistic effects. With such a large project, where several blocks are being built, the schedule can be planned so that the individual steps follow each other, and significant savings can be achieved.

So the 25 percent savings isn’t completely out of the question?
As I already said, the tender is ongoing, so I would not comment on specific numbers, but I can say that it will certainly be a satisfactory offer for the Czech Republic.

You talked about savings on four blocks. But the government still hasn’t decided whether it will be just two blocks, or really all four. How would this be reflected in the price if the government would end up ordering, for example, only two blocks? Is your offer structured in this way as well?
In the offer, we took into account different scenarios, which related not only to the number of blocks, but also to different construction schedules, different connections, so these options are reflected there. I can say that even with the construction of two blocks, the economies of scale would become apparent, there will still be significant savings.

How can you actually guarantee the price for such a long time? That project will take at least 12 years for the first block. Does your offer include an inflation clause?
In the past 50 years, our company has continuously built nuclear units, over 36 nuclear units, without a single day’s break. In those 50 years, of course, it happened repeatedly that, either due to some external influences or as a result of the domestic situation, there was a jump in prices. For example, in the late 1970s there was a second oil crisis, or in 1997 there was a very serious financial and currency crisis in the Republic of Korea, in 2008 there was a global financial crisis, and in all these periods we managed to overcome these crises and deal with these factors.

What will be key for the investor is the resulting price of electricity from the new unit. In previous years, new projects in Europe reached a level of around 90 euros per megawatt hour of electricity produced. However, ČEZ says that it wants to achieve a significantly lower price. Is it realistic that based on your offer they will actually produce the blocks significantly cheaper than 90 euros?
There are studies by reputable institutions, whether it’s Bloomberg or the International Atomic Energy Agency, which have shown that Korean nuclear power is very competitive. Whether it is construction or operating costs. In those reports, it is stated that our company is able to reduce costs to almost half the level compared to our competitors. So we hope that thanks to our truly competitive offer, we will enable the Czech Republic to secure favorable electricity prices.

Are you talking about half of the production price of 90 euros?
As for this price level of 90 euros per MWh, we can certainly get below it.

KHNP writes in its presentations that your offer is better not only from the point of view of economic feasibility, but also technology and safety. Are you saying that your reactor is safer than, say, the French one?
Our offered model has already passed the approval procedure of the Association of European Operators, so it already has a European certificate. Furthermore, our Korean regulatory authority has already started the process of approving the standard design of the reactor, and the Czech State Office for Nuclear Safety has already established cooperation with the Korean Nuclear Safety Commission. Both of these independent bodies will ensure that security requirements are met. They will also cooperate during the safety certification of our block, so I can say that our offered model meets even the strictest safety requirements.

The government has still not given an answer to the question of whether the investor in the construction of several units will be CEZ in the form we know it now, i.e. a private company with a majority of the state, or some state company. How important is this question to you for the eventual conclusion of a contract? Do you prefer to enter into the contract with a purely state-owned company, or does it not matter?
We are ready to complete the project successfully. On our side, we count on various systemic tools, including the involvement of state-owned Korean financial institutions. Our offer also includes a declaration by these institutions that they are ready for possible financial participation.

So is it the case that the Korean state or the Korean government would be able to offer a favorable loan for the construction of blocks in the Czech Republic?
It’s not the government directly, but the state-owned Korea Export and Import Bank and the Korean Commercial Insurance Company. These institutions are ready, if interested, to provide capital under more favorable conditions than commercial financial institutions. Better conditions mean including lower interest rates.

And perhaps a longer repayment period?
This is common with these state institutions, they are there for long-term investments.

The schedule of the project for one block counted on the fact that it should be ready as early as 2036. Is this still realistic? And will the deadline be moved if more blocks are being built at once?
Thanks to our fifty years of experience, we are really able to keep the deadlines we promise. Although there has already been a three-month delay on the Czech side in the ongoing tender, we are still able to deliver the first block by the end of 2036.

Aren’t you worried that if four units are actually built, that eventually in the coming years, nuclear energy will not be able to compete with renewable sources that can be produced more cheaply? And that in the end the project will not be completed on such a large scale by the investor?
This is a very creative idea. Because, on the one hand, we have electricity from alternative energy sources, which can be cheap, but that does not mean that the price of the entire system is also cheap. So the price for having to keep the whole system running. In this respect, the electricity is not cheap anymore.

Currently, renewable energy sources can be cheaper only in very specific areas that have some exceptionally good conditions. I have a question for you, do you think nature is merciful and has compassion for us? My answer is absolutely not. In Texas, they have solar panels on an area of ​​about 3.6 million square meters, and when the large hail fell there now, they damaged the panels. Last winter, again in Texas, there was some kind of cold wave that caused the wind farms to shut down. And in 2016, in March, a partial solar eclipse led to the shutdown of solar panels with the power of six nuclear units.

So of course I would also like to live in harmony with nature, but unfortunately human civilization cannot rely too much on nature. I have already talked about the fact that in the 1970s our country went through the first and second oil crises, at the end of the 1990s the currency crisis and in 2008 the global financial crisis. At the same time, our country is 97 percent dependent on the import of energy raw materials, so if there was a sharp increase in energy prices, it would lead to the collapse of the economy. But we overcame all those crises precisely thanks to nuclear energy.

Jana Klímová

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