The Dukovany nuclear power plant in the Czech Republic / Courtesy of Korea Hydro & Nuclear Power

A U.S. nuclear energy firm's objection to the Czech Republic's choice of Korea as the preferred bidder for building two nuclear power units in the Central European country is feared to disrupt the project.

Last month, Korea Hydro & Nuclear Power (KHNP) secured a 24 trillion won ($18 billion) deal to build nuclear reactors in Dukovany, surpassing France's EDF. However, the U.S. firm Westinghouse has been protesting the decision, citing concerns over intellectual property (IP) issues.

Westinghouse said, Monday, it filed an appeal with the Czech Anti-Monopoly Office to challenge the decision by Czech state-owned energy company CEZ, arguing that the Korean firm is not qualified for the job.

"KHNP's APR1000 and APR1400 plant designs utilize Westinghouse-licensed Generation II System 80 technology. KHNP neither owns the underlying technology nor has the right to sublicense it to a third party without Westinghouse consent," it said in a statement.

"Further, only Westinghouse has the legal right to obtain the required approval from the U.S. government to export its technology."

The protest stems from an IP issue related to the APR1000, a 1,000-megawatt nuclear plant type that KHNP is attempting to export to the Czech Republic. While Korea developed the APR1000 alongside the APR1400, its foundational technologies belong to Westinghouse, which has used its IP rights to challenge the decision.

Westinghouse initially helped Korea develop its nuclear capabilities by constructing Kori Nuclear Reactor No. 1 in 1969. This reactor served as a model for subsequent nuclear plants in Korea. Out of the 28 reactors built in Korea to date, 18 were based on the Kori reactor design, as well as those Korea has exported.

Due to historical agreements and regulations set by the Nuclear Suppliers Group, an international organization Korea joined in 1995, Seoul must obtain approval from the U.S. Department of Energy to export nuclear power plants and technology. Westinghouse holds the rights to submit such Korean bids to U.S. authorities.

Westinghouse filed a lawsuit against KHNP in the U.S. District Court for the District of Columbia in October 2022, arguing that the Korean firm's export bid to the Czech Republic was improper. In September of last year, the court dismissed the case, stating that nuclear power technology export controls fall under the jurisdiction of the U.S. government, not the American firm. Westinghouse appealed the decision the following month.

In November 2022, KHNP directly applied to the U.S. Department of Energy for approval of its export bid to the Czech Republic. However, in January 2023, the U.S. authority declined the application, stating that it must be submitted by an American entity.

Minister of Trade, Industry and Energy Ahn Duk-geun speaks during a press conference in Sejong, Monday. Courtesy of Ministry of Trade, Industry and Energy

Seoul-Washington ties

But Minister of Trade, Industry and Energy Ahn Duk-geun dismissed concerns that the legal issue could affect KHNP's planned export to the Czech Republic. He said the ministry is negotiating with the U.S. Department of Energy to resolve the conflict between Westinghouse and KHNP.

"I assure you that KHNP's export to the Czech Republic will proceed," Ahn told reporters in Sejong, Monday. "We have communicated with the U.S. government about our position. Both parties have agreed to work toward resolving the conflict between KHNP and Westinghouse."

Lee Ho-hyeon, deputy minister for energy policy, said Seoul and Washington share common beliefs in the global nuclear industry, suggesting that the ongoing bilateral negotiations are expected to satisfy both countries.

"Korea is one of the few countries that shares the values of democracy and human rights with the U.S. and also has globally competent nuclear technologies. They also share a view that nuclear technologies shouldn't be exported to certain nations where they might lead to the proliferation of nuclear weapons and other global threats," Lee said, implying that Korea is an ideal nuclear partner for the U.S. "For two nations like that, nuclear cooperation is an essential (diplomatic) condition."

KHNP is actively defending its export bid, acknowledging that Westinghouse initially played a crucial role in developing Korea's nuclear industry. However, KHNP asserts that Korea now possesses its own advanced technologies that exceed those previously provided by the American firm. The company also emphasizes Korea's superior construction experience compared to the U.S., pointing out that many planned nuclear plant projects in the U.S. were canceled following the Three Mile Island accident in 1979.

"It appears that resolving the KHNP-Westinghouse dispute relies more on the outcome of the negotiations between the two governments than on how the companies themselves handle it," a KHNP official said. "We're now supporting the ministry's diplomatic initiative and acting as one team."

KHNP President & CEO Whang Joo-ho visited the U.S. earlier this month with Ahn and Korea Electric Power Corp. CEO Kim Dong-cheol to meet Westinghouse officials. However, they returned without achieving significant results, according to the government, Friday. The following day, the presidential office said that it has been in close consultation with the U.S. government to resolve the dispute.

President Yoon Suk Yeol is slated to visit Prague next month with the heads of major Korean conglomerates, including Samsung, Hyundai Motor, LG and SK. There is speculation that this visit could be critical in the finalization of KHNP's export deal with CEZ, with the signing expected in March.