ROK / KSA deal for 100 MW SMART Reactor could be a model for U.S.

A deal inked in 2011 between ROK and KSA could be seen as a model to form the basis for an agreement for U.S. firms to export nuclear technology to KSA. Is anyone looking into this?

In November 2011 The Republic of Korea (ROK) signed an agreement (PDF file) for peaceful uses of nuclear technology with the King of Saudi Arabia (KSA). The 16 part document is crystal clear on what can and cannot be accomplished by the two nations. The agreement could be used as a model for a U.S. 123 Agreement with KSA.

smart logoThe result of the agreement is that ROK and KSA have teamed up for a $1 billion project to build a 100 MW (electrical) SMART small modular reactor in KSA using ROK technology and expertise.

Nonproliferation experts have expressed concern that giving KSA the right to enrich uranium would lead to development of nuclear weapons. The ROK agreement with KSA does allow enrichment, but stops it at 20% U235 and any further work would require agreement by both countries. These concerns mirror the two schools of thought – one that the agreement is useful and the other is that it is not.

Given the current effort to “denuclearize” the Korean peninsula taking place in Seoul, the likelihood that ROK would agree to such a move is remote. It would not look good to on one hand be working to reduce nuclear threats in Southeast Asia while creating new instability in the Middle East. Experts in foreign relations call this “linkage” and the concept probably applies here. Additionally, the terms of the U.S. 123 Agreement with ROK would likely come into force causing a new round of diplomatic efforts to address the issue should it come up.

However, ROK might well make the argument that none of the components in the SMART reactor are subject to its 123 Agreement with the U.S.  That agreement brings into play the NRC rules on export licensing of Fuel Element Fabrication Plant Equipment and also the jurisdiction of the Departments of Energy and Commerce.  The information in 10 CFR 110 is the basis for a list of controlled items.

For this reason the interpretation of the ROK 123 Agreement with the U.S. might be open to debate concerning possible conflicts between U.S. policy and ROK’s agreement with KSA for the SMART reactor. As noted this is a job for diplomats and nonproliferation experts in the area of export control to clear up any items that might be at cross purposes.

Bear in mind that South Korea’s 1400 MW PWR design, which is the basis for construction of four units in the United Arab Emirates, has substantial U.S. technology in it.  Any effort by South Korea to sell these reactors to Saudi Arabia would have to be preceded by a 123 Agreement between Saudi Arabia and the U.S.

According to a comparative review of export controls by various nations other than the U.S., ROK has a mature export control licensing policy framework and control mechanisms.  (Pillsbury Winthrop Shaw Pittman LLP, prepared for the Nuclear Energy Institute) It follows that ROK will have strong views on the subject of what it is allowed to export on its own authority. The U.S. desire for a gold standard, which is a prohibition on enrichment, accepted by the UAE, may or may not be accepted by ROK and KSA.

What If KSA Changes Its Mind?

A key issue regarding enrichment beyond 20% U235 and/or reprocessing is the concept of “timely warning.” Given the combination of IAEA inspections and the large number of ROK people on the ground, would KSA still have the ability to conceal such activities if it decided to start down the path towards nuclear weapons?

In terms of enrichment the mere act of pulling back in canisters of UF6 at 20% to push the enrichment level beyond 80% would not go unnoticed / undetected or at least for very long.  In the case of reprocessing, the construction of the necessary heavily shielded buildings would show up on satellite coverage plus the procurement of supply chain items would also be warning signs.

Even so a door remains open for KSA to pursue nuclear weapons should it choose to disregard its agreements with ROK and the US, assuming there is one.  That would make KSA a rogue state with all kinds of consequences.

In the meantime, the KSA leadership is most certainly watching to see if President Trump tears up the Iran nuclear deal, and if that country restarts its nuclear program.  Similarly, North Korea will also be watching that development since an action by Trump against U.S. interests would send a message to DRNK and KSA that this country is not a reliable partner in nonproliferation agreements. Given the erratic nature of decision making by Trump, predicting where things will go is a crap shoot.

Selected Terms and Conditions of the ROK / KSA Nuclear Agreement

Here’s what’s in the agreement and also what the SMART reactor is all about. This is a full a range of work scope for doing business.

The agreement lists a full suite of forms of cooperation.

(a) Exchange of visits and training of scientists and technicians;
(b) Exchange of scientific and technical information and data;
(c) Organization of joint symposia, seminars and working groups;
(d) Transfer of nuclear material, material, equipment and technology;
(e) Provision of relevant technological consultancy and services;
(f) Execution of joint research or projects on subjects of mutual interest; and
(g) Other forms of cooperation as may be agreed upon by the Parties.

In terms of safeguards the agreement in Article 8 bans reprocessing and limits enrichment of uranium to 20% U235 which is the boundary between low enriched and highly enriched product.  There is a loophole which says that the parties could agree to enrich to higher levels, but both nations would have to sign off, which is unlikely from the the South Korean perspective.

Article 9 prohibits military applications. Article 10 implements IAEA safeguards including inspections. Article 11 covers physical security for all fissile material, nuclear facilities, and equipment. Article 13 covers environmental protection and responses to nuclear accidents.

History of the SMART Reactors Project

The 300 MWt / 100 MWe small modular reactor (KEPCO technical briefing PDF file) is the product a consortium of 12 ROK companies which initially put up $83 million starting in June 2010 to design the reactor.

The 12 firms making the investment have a 51% equity stake in the project. Additional partners are the Posco Group with a 28% equity share and other companies having smaller equity positions include Daewoo, STX Heavy Industry, and Iljin Energy. Since 2010 over $300 million has been invested in development of the SMART reactor.

The consortium is led by the Korea Electric Power Co. (Kepco) and the design work was done at the Korea Atomic Energy Research Institute (KAERI).  SMART is an acronym for “System Integrated Modular Advanced Reactor.” (Project home page)

SMART is PWR type design with an internal steam generator. It has a 50 year design life and a projected three year refueling cycle. In addition to generating electricity, it can also be used for thermal applications including district heating and desalinization of water which is where KSA’s interests come in.

smart reactor image

Image source: KEPCO Briefing to IAEA 2013

The SMART reactor received design approval from ROK’s nuclear safety regulatory agency in 2012. A FOAK demonstration unit will be built in South Korea.

In March 2015 ROK signed a deal with KSA to provide two SMART reactors in that country and to position the design for export sales. The 2015 agreement was signed by KAERI  and KSA’s King Abdullah City for Atomic and Renewable Energy (KA-CARE).

A three year $130 million feasibility study could be followed by a KSA commitment to build the first two units for an preliminary estimated cost of $1 billion. Assuming the cost of the 100 MWe units comes in at $4000/Kw, each reactor will cost $400 million with the remaining $200 million for balance of plant such as turbines, switch yard, and grid improvements. Training of KSA experts to build and operate SMART reactors is part of the package.


IAEA profile of the SMART Reactor

The agreement places South Korea nuclear firms as having the most experience in dealing with KSA and having the most significant agreements to sell nuclear technology to KSA compared to all other nations or firms.  Add to this the fact that South Korea is building four 1400 MW PWRs for the United Arab Emirates (UAE) and has an experienced workforce in the Middle East.

In September 2015 ROK and KSA signed an update to their agreement which called not only for two SMART reactors to be build in KSA, but also that the work will take place jointly in terms of construction of the first units.

KA-CARE has stated it will take an equity stake in development and construction of the domestic and marketing and sale of export units.

Last February the SMART project consortium kicked off work on the development of the supply chain citing ASME standards as the basis for contractors with vendors.

NEI Leads US Industry Delegation
to KSA Over Its Nuclear Energy RFP

(NucNet) The US Nuclear Energy Institute led an industry delegation to Saudi Arabia last week aimed at clarifying Saudi nuclear energy development plans and identifying potential Saudi partners.

NEI said the visit, in partnership with the US-Saudi Arabian Business Council and the US Departments of Commerce, Energy and State, provided an opportunity to deepen US industry relationships with officials in the kingdom and share US commercial opportunities.

To meet soaring electricity demand and diversify its electricity-generating mix away from fossil fuels, Saudi Arabia plans to develop two large nuclear power plants. Plans for units beyond the first two have note been speified in procurement actions.

Saudi Arabia is in the process of selecting finalists from five nations – the US, China, Russia, France and South Korea – that it invited to bid on a project to build the two plants. The selection of a winning bid and the signing of contracts are scheduled to take place by the end of 2018.

Nonproliferation Letter to Congress

atoms-for-peace-stamp_thumb.jpgIn a related development, a group of 24 nuclear nonproliferation experts has sent a letter to Congressional leaders urging nuclear energy cooperation with Saudi Arabia.

The letter, organized by the Nuclear Innovation Alliance, a trade group that promotes commercial development of advanced reactors, recommends that Congress support a commercial nuclear trade agreement, known as a Section 123 agreement, with the kingdom that prevents the misuse of sensitive commercial nuclear energy technologies. It said in part,

“The successful negotiation of a 123 agreement with Saudi Arabia is one part of a larger strategy, and this letter from eminent nonproliferation experts reinforces the national and global security importance of reaching a pragmatic agreement.”

Significantly, NEI highlighted the letter on its website. The letter urges the US not to seek conditions that would ultimately cause the Saudis to reject such a cooperation agreement.

The Trump administration has been negotiating a Section 123 agreement with Saudi Arabia that would allow the kingdom to buy nuclear reactors from US companies.

Saudi Arabia has indicated it wants a deal without the usual “gold standard” of prohibitions on enrichment and reprocessing that are essential steps in producing nuclear weapons.

The Partnership for Global Security, a policy and research organization, also issued a press release endorsing the letter signed by the nonproliferation experts.

Ken Luongo, President of PGS, said: “This letter underscores the vital importance of preventing nuclear proliferation and an arms race in the Middle East.

“The most pragmatic way to prevent weapons potential in Saudi Arabia is to deeply engage that nation in the web of U.S. non-proliferation conditions and controls through a nuclear cooperation agreement.”

He emphasized, “Failure to conclude an agreement will allow another nation to be the primary nuclear partner with Saudi Arabia for the remainder of this century – and it may be one that does not demand the same rigorous non-proliferation controls as the U.S.”

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Dan Yurman ~ About this blog and disclaimers for NeutronBytes ~ ~ ** Contact Me ~ ~ Text via Signal 216-218-3823 ~ I am NOT active on Facebook, Reddit or Instagram. Attempt no landings there. ** Header Image Credit: ~ ** Emails sent by readers about blog posts are considered to be comments for publication unless otherwise noted. ** The content of this blog is protected by copyright laws of the U.S. "Fair use" provisions apply. The RSS feed is for personal use only unless otherwise explicitly granted.
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