President Moon Jae-in’s key policy initiative of shutting down South Korea’s nuclear power plants has turned into a major scandal bedeviling his administration. Questions have emerged as to whether the government has been involved in improperly manipulating internal reports to support Moon’s ‘nuclear phase out’ policy.
While South Korean prosecutors are investigating government officials and other key figures related to nuclear power plants who allegedly manipulated an economic feasibility study, new evidence has come out that reveals more of the government’s involvement.
According to the JoongAng Ilbo newspaper, Rep. Yang Geum-hee from the main opposition People Power Party (PPP) acquired evidence from whistleblowers that shows the Ministry of Trade, Industry and Energy ordered the country’s sole nuclear power company Korea Hydro & Nuclear Power (KHNP) to submit reports in a certain way.
The purpose was to have the KHNP report to the trade ministry that it should stop the construction of units 3 and 4 of the Shin Hanul nuclear power plant and shut down the Wolsong Unit 1 prematurely.
KHNP is a quasi-government agency that is under the supervision of the trade ministry.
While the trade ministry was preparing its 8th Basic Plan for Electricity Supply and Demand in November 2017, it ordered KHNP to include conclusions saying that the construction of Shin Hanul units 3 and 4 should be stopped and the Wolsong unit 1 should be prematurely shut down. It even provided specific phrases to use in the report. At that point, the government had spent more than 700 billion won ($621.4 million) on the construction of the Shin Hanul units but still planned on canceling the construction.
The trade ministry has been arguing repeatedly that these internal reports were prepared by KHNP and that it had no influence over it. But new testimony from an insider shows that it was the other way around. “If it really is true that someone from outside tried to control KHNP’s independent assets, it obviously is an act that harms the company,” said Cho Sung-jin, a professor at Kyungsung University who was a board member of KHNP at that time.
According to PPP Rep. Yang, employees at KHNP were uncomfortable with its management and the trade ministry pushing for the nuclear phase-out policy by coordinating on the terms to use in the report. Some employees said it would become a problem if KHNP reported to the trade ministry in this way without getting it passed through the board meeting first. The trade ministry told KHNP to say that “stopping the construction of [Shin Hanul units] is unavoidable in order to meet the Energy Roadmap goal set at the cabinet meeting.”
There were debates even among KHNP senior officials and they revised the sentence to read “it appears to be difficult to proceed with the project when considering the Energy Roadmap goal set at the cabinet meeting.”
A senior member of KHNP who opposed the management’s decision was suspended from his assignment for a month and was ultimately demoted. The trade ministry excluded units 3 and 4 of Shin Hanul and Wolsong Unit 1 from the 8th Basic Plan for Electricity Supply and Demand with the final report prepared by KHNP.
According to the investigation by the Board of Audit and Inspection and the prosecution, the government’s scheme to shut down the Wolsong Unit 1 became serious in April 2018. At that time, one of President Moon’s advisors reported that some steel bars were exposed outside of Wolsong Unit 1.
Moon then asked his advisors “when is the decision to permanently shut down the unit going to come out?” Moon’s comments were conveyed to then-Trade Minister Paik Un-gyu on April 2, 2018.
The next day, a senior official from the trade ministry told Paik that “Wolsong unit 1 would eventually be prematurely shut down but it would need to be operated for another two and half years until the final decision to shut down is made by the Nuclear Safety and Security Commission [NSSC].”
At that time, Paik reportedly said “do you want to die?” to the official. That official changed his report to say it is necessary to shut down Wolsong unit 1 immediately. This was sent to the presidential Blue House.
One of the problems with shutting down the unit prematurely was that the NSSC confirmed that it had no safety-related issues in February 2015. This was why the government had to make an issue of its economic feasibility. KHNP requested that a domestic accounting firm conduct the economic feasibility study.
At first, the accounting firm provided a report by setting the capacity factor at 85 percent. A month later, the firm lowered it to 70 percent after consulting with the trade ministry and KHNP. However, it still showed that the profit from operating the plant would be 177.8 billion won when compared to shutting it down right away.
The accounting firm was told to lower the capacity factor to 60 percent, but it still stated the profit was 22.4 billion won. The final results showed that it was more profitable to continue its operation but KHNP concluded that it was better to shut it down.
Shutting down in South Korea while exporting nuclear power abroad
One of the strangest agreements that President Moon made with President Joe Biden in their recent summit was to cooperate in exporting nuclear power plants abroad. The joint statement between the two said that both sides “commit to develop cooperation in overseas nuclear markets, including joint participation in nuclear power plant projects, while ensuring the highest standards of international nuclear safety, security, and nonproliferation are maintained.”
The Chosun Ilbo newspaper ran an editorial on May 25 that said, “the government’s plan to cooperate with the United States to export nuclear power plants is technically admitting that its policy of phasing out nuclear power has problems.” The editorial said it is unethical for the Moon administration to sell nuclear power plants overseas while proceeding with a policy of phasing out nuclear power domestically for safety reasons.
