South Korea’s 24 trillion won nuclear export project to the Czech Republic, the largest in the country’s history, is facing increasing challenges due to objections from U.S.-based Westinghouse Electric Company. Westinghouse, a pioneer in the commercialization of pressurized water reactors, claims that South Korea’s reactor design infringes on its proprietary technology. In response, Korea Hydro & Nuclear Power (KHNP) asserts that their technology is fully independent and that there should be no issues with the export. What is driving Westinghouse’s strong opposition?
The Chosun Ilbo has analyzed the background of the Westinghouse situation through expert insights. Westinghouse’s ownership is split between a Canadian private equity firm and a uranium company, suggesting a strong focus on immediate profitability. With Westinghouse’s competitive edge significantly weakened, there appears to be an intention to curb the expansion of Korean nuclear power in the global market. The situation is seen as too complex to be resolved solely through the South Korea-U.S. alliance.
◇ Canadian private equity firm Brookfield now controls Westinghouse
According to the nuclear industry on Aug. 25, Westinghouse’s largest shareholder is Brookfield Business Partners, a subsidiary of Canada’s private equity firm Brookfield Asset Management. Brookfield became the major stakeholder after acquiring the struggling company in 2018. In 2022, Brookfield sold 49% of its shares to the Canadian uranium company Cameco but retained a 51% majority stake.
The ongoing dispute between Westinghouse and KHNP since the late 2010s is largely attributed to recent changes in Westinghouse’s ownership structure. An industry insider said, “Westinghouse and South Korea have had a strong technical ties and collaboration since the 1970s. But with a private equity fund now the largest shareholder, there is increased pressure to raise technology infringement issues against South Korea.” While Westinghouse is regulated by the U.S. government due to its advanced nuclear technology, its financial decisions are heavily influenced by its major shareholders. Some suggest that Patrick Fragman’s appointment as CEO in 2019, following his role in Alstom’s nuclear bid for the United Arab Emirates, may have influenced the situation, particularly given his French background and South Korea’s recent success over France in securing the Czech nuclear deal.
◇ Struggles with capability, workforce challenges
There is also speculation that Westinghouse is increasing its pressure due to South Korea’s repeated success in winning nuclear contracts. While Westinghouse is still lauded for its advanced core technology, its capacity to supply new nuclear plants has greatly diminished after a 30-year pause in domestic construction since 1979.
At its peak in the late 1970s, Westinghouse employed about 55,000 people, but this number has now dwindled to less than one-sixth, with only around 9,000 employees remaining. The company’s core business areas have also been reduced to operations and management. Westinghouse was eliminated early in January from the recent Czech bid where it competed against Korea and France. Professor Moon Joo-hyun of Dankook University noted, “While KHNP can comprehensively manage costs and timelines, Westinghouse lacks these capabilities,” adding, “The aging of its technical workforce has also heightened its sense of crisis.”
◇ Pressuring South Korea’s expansion into emerging nuclear markets
Westinghouse’s aggressive stance appears to be a strategic move to counter South Korea’s expansion into emerging nuclear markets, such as the Middle East and Europe, with the global nuclear facility market expected to double by 2050. The American nuclear company seems to fear that South Korea, having already successfully built nuclear plants in the UAE, might extend its dominance to Europe, starting with the Czech Republic. An industry insider said, “Westinghouse’s actions indicate a calculation that overlooking this issue could jeopardize their ability to secure a fair share in future market expansions, such as in the Middle East.”
