Domestic nuclear construction and management fall under the Ministry of Climate, Environment and Energy; exports under the Ministry of Trade, Industry and Energy

Korea Hydro failed to brief climate ministry before dissolving 'Team Korea' contractor pact for Czech plant

Nuclear stocks tumble as industry warns of policy incoherence at critical juncture

An aerial view of Dukovany, the site designated for the Czech Republic's new nuclear power plant. [Korea Hydro & Nuclear Power]
An aerial view of Dukovany, the site designated for the Czech Republic's new nuclear power plant. [Korea Hydro & Nuclear Power]

Concerns are mounting that nuclear energy policy is becoming increasingly siloed after oversight of Korea Hydro & Nuclear Power was divided among three ministries — the Ministry of Climate, Environment and Energy, the Ministry of Trade, Industry and Energy, and the Ministry of Science and ICT — following the launch of the Lee Jae-myung administration.

Critics point in particular to the absence of a single control tower for key functions: the climate ministry holds the authority to recommend a Korea Hydro president and oversees domestic nuclear construction and management, while the trade ministry handles nuclear exports. Industry observers question whether there is any need to separate domestic operations from export activities, given that domestic competitiveness directly underpins export competitiveness.

According to government sources Sunday, Korea Hydro and the trade ministry ended negotiations on a construction contract with the Daewoo Engineering & Construction–Doosan Enerbility consortium for the Dukovany nuclear power plant project in the Czech Republic on Oct. 29 without prior consultation with or notification to the climate ministry.

Multiple climate ministry officials said they learned of the termination of the Czech plant contractor arrangement through media reports. "Since the trade ministry took over nuclear export-related work after the reorganization, even Korea Hydro no longer reports relevant matters to us," one official said.

The Czech nuclear contract was originally won under the former Ministry of Trade, Industry and Energy before last October's government reorganization. Korea Hydro selected the Daewoo Engineering & Construction–Doosan Enerbility consortium as its construction contractor in 2018 and signed a joint cooperation agreement — the so-called Team Korea arrangement — to pursue the Dukovany project. The consortium entered formal bidding in 2022, was named the preferred negotiating partner in July 2024, and signed a final contract with Czech developer EDU II in June last year.

On Oct. 29, however, Korea Hydro announced it was terminating construction contract negotiations with the consortium, citing an inability to reach final agreement on key contract terms. Korea Hydro said it would begin procedures to dissolve the joint cooperation agreement with the existing consortium and prepare a new tender to select a replacement contractor.

Industry observers say the move makes it likely that Daewoo Engineering & Construction will be dropped from Team Korea, while Doosan Enerbility — whose ties to Trade Minister Kim Jung-kwan are well known — is expected to remain, as its separately concluded supply contract for major components, including the reactor and turbine generator, remains intact.

When Korea Hydro was selected as the preferred negotiating partner and signed the final Czech contract, the officials overseeing the work at the operational level were Lee Ho-hyeon, then director general for energy policy, and An Se-jin, then director of nuclear power policy. After last October's reorganization, both moved to the climate ministry, where they now serve as second vice minister and director general for energy transition policy, respectively, handling domestic nuclear construction and management. The reorganization has effectively sidelined the expertise and networks they built around the Czech project and US nuclear firm Westinghouse.

The trade ministry's current operational leads on nuclear exports are Kang Gam-chan, director general for trade and investment, and Kim Chang-hui, director for nuclear strategy planning. When Korea Hydro was named the preferred negotiating partner in July 2024, Kang was serving as director of industrial policy and Kim was director of KOTRA's foreign investment support center. Kang was promoted to his current post in November last year, and Kim joined the ministry's nuclear strategy planning office in January this year, each taking on Czech project-related responsibilities only after the reorganization.

Within Korea Hydro, Choi Il-kyung, executive vice president and head of the project management division, has taken charge of the Czech construction contract matter. Choi, a graduate of Sudo Technical High School, was appointed standing director on June 30 in an abrupt move ahead of a scheduled wage-peak transition. He previously worked on the early stages of the UAE nuclear project and the construction of Shin Hanul units 3 and 4. The UAE nuclear project is currently the subject of litigation, with Korea Hydro seeking an additional settlement of 1.6 trillion won ($1.19 billion) from Korea Electric Power Corp. over disputed construction costs.

The nuclear industry has voiced frustration over the split between domestic and export functions, arguing that domestic industrial competitiveness is inseparable from export competitiveness. There are also claims that dividing nuclear affairs between two ministries has produced policy misalignment.

"It is simply baffling that the trade ministry and Korea Hydro chose to dissolve the Team Korea construction contract arrangement at a time when the climate ministry is conducting a public deliberation on whether to include new nuclear construction in the 12th Basic Plan for Electricity (2026–2040)," one industry official said.

The official added that the industry fears the fallout could shape public opinion in a way that dismisses domestic nuclear construction as secondary — overshadowed by the turmoil surrounding the overseas Team Korea arrangement.

The climate ministry is conducting a public deliberation process through December on whether to use nuclear power to meet the sharply rising electricity demand expected from three major mega-projects. The outcome of the deliberation is set to be incorporated into the 12th Basic Plan for Electricity.

Nuclear-related stocks tumbled across the board after Korea Hydro announced the termination of construction contract negotiations for the Czech Dukovany plant.

"Given the significant impact the termination of the Czech plant contractor contract has had on the stock market, one has to wonder whether the trade ministry, which oversees nuclear exports, should have consulted in advance with the relevant ministries that supervise Korea Hydro," a government official in Sejong said.


oskymoon@heraldcorp.com