Doosan, DL consortium to invest $130 mn in X-Energy for SMR project

Korea-US partnerships in the SMR business are growing under the Yoon Suk-yeol government, which is nurturing the reactor industry

SMRs are one of the key technology areas in which the US and S.Korea have agreed to bolster their alliance

Ji-Hoon Lee and Ik-Hwan Kim 2

2022-12-12 21:23:53 lizi@hankyung.com

Energy

A South Korean consortium led by Doosan Enerbility Co. and DL E&C Co. is investing $130 million in X-Energy LLC, a US nuclear reactor and fuel design engineering company, to expand Korean firms' presence in the fast-growing small reactor business.

Doosan and DL E&C, as strategic investors, have participated in a fund created by Whale Investment Co., a Korean private equity firm, which will make the $130 million investment in the US company, people familiar with the matter said on Monday.

The state-run Export-Import Bank of Korea is also participating in the fund as a financial investor, sources said.

With the investment, the Korean consortium will take a 5% stake in X-Energy, which is seeking to list its shares on the US market in the first quarter of next year, they said.

NuScale employees check an SMR test facility

With the equity purchase, Doosan and DL E&C will also likely take on machine manufacturing as well as engineering, procurement and construction (EPC) projects of X-Energy’s small modular reactor (SMR) business, the sources said.

SMRs, designed to produce less than 300 megawatts-electric, are regarded as next-generation energy sources due to their lower investment costs and fewer carbon emissions than existing large nuclear power plants. SMRs are also safer as they can be cooled without complicated safety devices.

According to a UK atomic energy research institute, the global SMR market is forecast to grow to 630 trillion won ($482 billion) with the rollout of 300 units by 2035.

Aerial view of NuScale Power’s small modular reactor (SMR) model

KOREA’S GROWING PARTICIPATION IN US SMR PROJECTS

With the latest investment by the consortium, Korean companies will be investing in three major US SMR companies sponsored by the US government.

SK Group’s holding company SK Inc. and its energy and battery affiliate SK Innovation Co. said in August they are investing $250 million in TerraPower, a US nuclear power venture founded by Bill Gates, to venture into the SMR business.

Last month, Hyundai Heavy Industries Group also said it is investing $30 million, through its shipbuilding affiliate Korea Shipbuilding & Offshore Engineering Co. (KSOE), in TerraPower.

Headquartered in Bellevue, Washington, TerraPower also holds design technology for the sodium-cooled fast reactor (SFR), a next-generation reactor.

South Korean President Yoon Suk-yeol (left at front) looks at a model of a domestically developed nuclear reactor at Doosan Enerbility’s plant

Doosan bought a combined $104 million worth of shares in NuScale Power LLC in two rounds between 2019 and 2020. The investment led to Doosan winning a billion-dollar supply contract for key SMR equipment from NuScale.

Business partnerships between South Korea and the US in the SMR business have been growing in recent years and are expected to rise further under the Yoon Suk-yeol administration.

Yoon, who was sworn in as president in May, has said his government would rescind his predecessor’s policy of phasing out nuclear energy. Yoon has committed to actively promoting the development of small modular reactors to foster South Korea's nuclear reactor industry.

Write to Ji-Hoon Lee and Ik-Hwan Kim at lizi@hankyung.com
In-Soo Nam edited this article.