[Edaily Reporter Kim Kyung-eun ] As South Korea’s entry into the U.S. nuclear power market becomes increasingly likely, forecasts suggest that construction of new nuclear power plants in the U.S. could begin in earnest as early as the first half of next year. With the construction of eight large-scale nuclear power plants included among the candidates for investment projects in the U.S., domestic nuclear power-related companies—such as DOOSAN ENERBILITY(034020), KEPCO Engineering & Construction(052690), and HyundaiEngineering&Construction(000720) —are expected to benefit significantly.

Jeong Hye-jeong, an analyst at KB Securities, stated in a report on the 23rd, “Although the exact form of South Korea’s entry into the U.S. nuclear power market has not yet been finalized, it is important to note that the likelihood of domestic companies participating in U.S. nuclear power projects is increasing.”

The Ministry of Trade, Industry and Energy announced the previous day that it had finalized the Encinal Gas Combined Cycle Power Project in Texas as the first investment project in the U.S. The project involves a preemptive investment of $22.3 billion to construct a 1.4-gigawatt (GW) gas turbine power plant, with principal and interest to be recovered over the next 20 years.

Although no specific implementation plans have been finalized yet, the construction of eight large-scale nuclear reactors and an Alaska liquefied natural gas (LNG) development project are being discussed as follow-up initiatives. According to government announcements and media reports, plans to build a total of eight new nuclear reactors in the U.S. and the acquisition of a stake in Westinghouse are under discussion.

It has been reported that the South Korean government is pursuing a plan to build two of the eight new nuclear reactors as APR1400s—a Korean-designed reactor—and to secure a 5–10% stake in Westinghouse, primarily through domestic private companies. However, as an agreement with the U.S. has not yet been reached, the timing of a formal announcement remains undetermined.

KB Securities predicted that the issues of risk diversification and financing—which had been cited as obstacles to nuclear power plant construction in the U.S.—will gradually be resolved. The U.S. is currently supporting the nuclear power industry primarily through the Department of Energy (DOE) and the Department of Commerce (DOC). Since the nuclear power projects currently under discussion are being led by the Department of Commerce, they may overlap somewhat with the 10-reactor construction project supported by the DOE through its long-term loan program; however, analysts believe that most of these projects will likely proceed separately.

Researcher Jeong stated, “Risk diversification and financing—which have long been identified as the biggest bottlenecks in U.S. nuclear power plant construction—are being addressed through these two channels,” adding, “We expect the construction of new nuclear power plants in the U.S. to begin in earnest by the first half of next year.”

Consequently, interest in domestic nuclear power-related companies is expected to continue. Although stock price volatility for related stocks may remain high since the specific structure and scale of the investment have not yet been finalized, the assessment is that the start of U.S. nuclear power projects involving South Korea is drawing near.

Researcher Jeong assessed, “Until just a few months ago, it was unclear whether large-scale nuclear power plants would be included in investments in the U.S., but now that the likelihood of participation has increased, the key question is how the project will proceed,” adding, “This is a phase where interest in domestic nuclear power-related companies across the board—including DOOSAN ENERBILITY, KEPCO Engineering & Construction, and HyundaiEngineering&Construction—remains valid.”