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South Korea's N-program - Impacts on the 'IMF era'

Nuclear Monitor Issue: 

(January 23, 1998) There has been little information on the impact of the financial crisis on the future of South Korea's nuclear power program reported thus far. However, there is ground for hope that perhaps little will change. We can be certain that a determined effort on the part of the environmental movement will help change the balance from a nuclear society to a more sustainable one.

(485.4815) Green Korea United - In early January 1998, Ulchin Unit- 3 started operations that were hailed by the media as a tremendous South Korean achievement and a way to reduce greenhouse gases at low cost. This demonstrates there was still a great deal of education required not only for the South Korean government but also for the media before the public can start to understand the nuclear problem.
Additionally the Korean Electric Power Corporation (KEPCO) has been able to secure US$25 million from UK banks, and because of the perceived stability of KEPCO, the terms are apparently more favorable than those that could be obtained by the majority of South Korean companies.
KEPCO continues to propagate the illusion that nuclear power is "made in Korea" but the main retirement -uranium- is all imported. Only the waste is "made in Korea". The uranium used in South Korea is largely from Australia and Canada and is extracted at a high cost not only by South Korea but by the exporting countries. Green Korea United and other environmental organizations are discussing how to expose this situation and to inform the public of the true costs of nuclear power. We would also like to join hands with activists fighting mining developments such as the Jabiluka mine in Australia to present a stronger case against the damage this industry causes at both the "cradle" and the "grave".

The economic crisis has also produced some factors in our favor and we believe that the impact of the financial crisis would be felt by KEPCO in several ways:

  1. Demand for energy and, consequently, expected income, may be expected to fall against projected figures as consumers both in industry and the domestic sector strive to reduce their energy bills.
  2. New taxes on energy inputs would be introduced by the government. For example, until now the South Korean government has not taxed oil inputs to KEPCO power stations. However, on January 15, the government announced that a tax would be applied to this oil.
  3. With the election of new President Kim Dae Jung in December, the transition committee has been busy evaluating past practices and formulating new plans. The transition team announced that subsidies for government companies would be closely scrutinized and subjected to more controls. Such subsidies were subject to few constraints on their use and reporting of expenditure was widely considered inadequate. KEPCO received a subsidy of about US$4 million yearly, without requirement to report on its use. This amount (only a small component of total subsidies) would have to be reduced under the budget prepared to satisfy the conditions of the IMF assistance. South Korean environmental groups would be lobbying for a reduction in the subsidies currently given to KEPCO for research and development.
  4. Currently, KEPCO has a monopoly on power sales but this is set to change. The government plans to change the law relating to electricity supply in the middle of 1998 to allow other companies to enter the market. The resulting competition is expected to lower prices and stimulate innovation.
  5. The change in predicted economic growth for South Korea from 5% to 2% would also result in a reworked long-term electricity supply plan. It is expected that large construction costs would be one of the main elements of the plan to be affected.

All these changes have the potential to help expose the true cost of nuclear power to the South Korean people both in terms of construction and waste disposal. If KEPCO is forced to operate in a competitive market and report expenditure on its nuclear programs in a more transparent manner there is hope that the prevailing nuclear madness in South Korea may finally be cured.

Source and Contact: Seok Kwang Hoon, Energy Campaigner, Green Korea United. 385-108 Hapjeong-dong Mapo-ku Seoul Korea Tel: +82 2 325 5525; Fax: +82 2 325 5677