A deal inked in 2011 between ROK and KSA could be seen as a model to form the basis for an agreement for U.S. firms to export nuclear technology to KSA. Is anyone looking into this?
In November 2011 The Republic of Korea (ROK) signed an agreement (PDF file) for peaceful uses of nuclear technology with the King of Saudi Arabia (KSA). The 16 part document is crystal clear on what can and cannot be accomplished by the two nations. The agreement could be used as a model for a U.S. 123 Agreement with KSA.
Nonproliferation experts have expressed concern that giving KSA the right to enrich uranium would lead to development of nuclear weapons. The ROK agreement with KSA does allow enrichment, but stops it at 20% U235 and any further work would require agreement by both countries. Given the effort to “denuclearize” the Korean peninsula taking place in 2018, the likelihood that ROK would agree to such a move is remote. Additionally, the terms of the U.S. 123 Agreement with ROK would likely come into force causing a new round of diplomatic efforts to address the issue should it come up.
However, ROK might well make the argument that none of the components in the SMART reactor are subject to its 123 Agreement with the U.S. That agreement brings into play the NRC rules on export licensing of Fuel Element Fabrication Plant Equipment and also the jurisdiction of the Departments of Energy and Commerce. The information in 10 CFR 110 is the basis for a list of controlled items.
For this reason the interpretation of the ROK 123 Agreement with the U.S. might be open to debate concerning possible conflicts between U.S. policy and ROK’s agreement with KSA for the SMART reactor. As noted this is a job for diplomats and nonproliferation experts in the area of export control to clear up any items that might be at cross purposes.
According to a comparative review of export controls by various nations other than the U.S., ROK has a mature export control licensing policy framework and control mechanisms. (Pillsbury Winthrop Shaw Pittman LLP, prepared for the Nuclear Energy Institute) It follows that ROK will have strong views on the subject of what it is allowed to export on its own authority.
Selected Terms and Conditions of ROK / KSA Nuclear Agreement
Here’s what’s in the agreement and also what the SMART reactor is all about. This is a full a range of work scope for doing business.
The agreement lists a full suite of forms of cooperation.
(a) Exchange of visits and training of scientists and technicians;
(b) Exchange of scientific and technical information and data;
(c) Organization of joint symposia, seminars and working groups;
(d) Transfer of nuclear material, material, equipment and technology;
(e) Provision of relevant technological consultancy and services;
(f) Execution of joint research or projects on subjects of mutual interest; and
(g) Other forms of cooperation as may be agreed upon by the Parties.
In terms of safeguards the agreement in Article 8 bans reprocessing and limits enrichment of uranium to 20% U235 which is the boundary between low enriched and highly enriched product. There is a loophole which says that the parties could agree to enrich to higher levels, but both nations would have to sign off, which is unlikely from the the South Korean perspective.
Article 9 prohibits military applications. Article 10 implements IAEA safeguards including inspections. Article 11 covers physical security for all fissile material, nuclear facilities, and equipment. Article 13 covers environmental protection and responses to nuclear accidents.
History of the SMART Reactors Project
The 300 MWt / 100 Mwe small modular reactor (KEPCO technical briefing PDF file) is the product a consortium of 12 ROK companies which initially put up $83 million starting in June 2010 to design the reactor.
The 12 firms making the investment have a 51% equity stake in the project. Additional partners are the Posco Group with a 28% equity share and other companies having smaller equity positions include Daewoo, STX Heavy Industry, and Iljin Energy. Since 2010 over $300 million has been invested in development of the SMART reactor.
The consortium is led by the Korea Electric Power Co. (Kepco) and the design work was done at the Korea Atomic Energy Research Institute (KAERI). SMART is an acronym for “System Integrated Modular Advanced Reactor.” (Project home page)
SMART is PWR type design with an internal steam generator. It has a 50 year design life and a projected three year refueling cycle. In addition to generating electricity, it can also be used for thermal applications including district heating and desalinization of water which is where KSA’s interests come in.
The SMART reactor received design approval from ROK’s nuclear safety regulatory agency in 2012. A FOAK demonstration unit will be built in South Korea.
In March 2015 ROK signed a deal with KSA to provide two SMART reactors in that country and to position the design for export sales. The 2015 agreement was signed by KAERI and KSA’s King Abdullah City for Atomic and Renewable Energy (KA-CARE).
A three year $130 million feasibility study could be followed by a KSA commitment to build the first two units for an preliminary estimated cost of $1 billion. Assuming the cost of the 100 MWe units comes in at $4000/Kw, each reactor will cost $400 million with the remaining $200 million for balance of plant such as turbines, switch yard, and grid improvements. Training of KSA experts to build and operate SMART reactors is part of the package.
The agreement places South Korea nuclear firms as having the most experience in dealing with KSA and having the most significant agreements to sell nuclear technology to KSA compared to all other nations or firms. Add to this the fact that South Korea is building four 1400 MW PWRs for the United Arab Emirates (UAE) and has an experienced workforce in the Middle East.
In September 2015 ROK and KSA signed an update to their agreement which called not only for two SMART reactors to be build in KSA, but also that the work will take place jointly in terms of construction of the first units.
KA-CARE has stated it will take an equity stake in development and construction of the domestic and marketing and sale of export units.
Last February the SMART project consortium kicked off work on the development of the supply chain citing ASME standards as the basis for contractors with vendors.