South Korea and the United States have agreed to revise an intellectual property accord to allow construction of the Korean-designed APR1400 reactor on U.S. soil. The revision eases IP restrictions that have long stood in the way of Korean nuclear exports, opening a path for reactor construction in the U.S. market.
The government briefed the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee on the progress of its U.S. investment negotiations at a closed-door plenary session on the 22nd, according to political sources.
Under the terms reported to lawmakers, the two countries agreed to permit construction of up to two APR1400 units in the United States, limited to nuclear projects that draw on the strategic investment framework. Under a settlement agreement signed in January last year between Westinghouse Electric Co. and Korea Electric Power Corp. and Korea Hydro & Nuclear Power, Korea had to pay more than 1 trillion won in technology licensing fees for each reactor export. The agreement also restricted where the IP could be used, making APR1400 construction in the United States effectively impossible.
Westinghouse had opposed revising the agreement, arguing that the Korean reactor would compete with its flagship AP1000 design. The calculus changed as Washington concluded it needed Korean construction experience to sharply expand domestic reactor building. The U.S. government pressed Westinghouse to revise the existing agreement, and that intervention broke the deadlock. The two countries plan to build a combined eight new reactors in the United States, including the two APR1400 units.
The government also reported that it had confirmed a gas-fired combined-cycle power plant in Encinal, Texas, as the first project under its U.S. investment program. Talks on a stake in Westinghouse tied to the nuclear partnership will continue at a level of 5% to 10%. Discussions on the Alaska liquefied natural gas project will proceed at a smaller scale than the $67 billion (about 91 trillion won) figure proposed by the U.S. side.
The two sides also set up a revenue-sharing structure designed to reduce loss exposure across the U.S. investment program. Even after principal and interest are recovered on an individual project, a 50-50 split of project revenue will remain in place until principal and interest are recovered across the entire portfolio. In the event a project is wound down, the Korean side will recover principal and interest first.
