Domestic conglomerates are expanding their role in the next-generation U.S. reactor business from investors to manufacturers and builders. In step with TerraPower founder Bill Gates’ visit to Korea, business agreements, equipment contracts, and meetings with executives were held throughout the day on the 14th.
On that day, SK Innovation signed a memorandum of understanding on key terms for cooperation in TerraPower’s next-generation reactor project, “Natrium,” in Seoul. The agreement was signed by SK Innovation CEO Choo Hyung-wook and TerraPower CEO Chris Levesque. Gates, SK Group Chairman Chey Tae-won, and Minister of Trade, Industry and Energy Kim Jung-kwan were also present.
SK Innovation and SK Inc. invested $250 million in TerraPower in 2022, becoming its second-largest shareholders. Under the latest agreement, they plan to expand participation in the first Kemmerer plant in the U.S. and subsequent commercial projects, while moving directly into business development.
On the same day, Doosan Enerbility signed a contract with TerraPower to manufacture the reactor containment vessel, support structure, and internal structures. HD Hyundai Chairman Chung Ki-sun met with Gates and Hyundai E&C CEO Lee Han-woo to discuss cooperation on commercialization. Around TerraPower’s core technology, the framework is taking shape with SK handling business development, HD Hyundai and Doosan Enerbility handling manufacturing, and Hyundai E&C handling construction.
There are more than 100 small modular reactor designs under development around the world. Standardized designs and component supply chains have not yet been established. Industry watchers say companies that secure early results will have an advantage in winning follow-on orders.
TerraPower’s Kemmerer Unit 1, under construction in Wyoming, is a 345MW plant. It became the first commercial-scale advanced reactor to receive a construction permit from the U.S. Nuclear Regulatory Commission (NRC) in March. Commercial operation is targeted for 2031.
In the past, the Barakah project in the United Arab Emirates was an export of a completed Korean nuclear plant. This time, the Korean companies are participating in a U.S.-origin technology project through equity investment, parts supply, and construction. Their strategy is to turn achievements from the early supply chain into follow-on orders for future units.
In the United States, the spread of AI data centers is prompting major tech companies to secure nuclear power. The U.S. accounts for about 25% of the world’s nuclear installed capacity, and demand to replace aging reactors is also adding momentum.
Natrium is a Generation IV sodium-cooled fast reactor that uses sodium instead of water as coolant. Reactor heat is stored in a molten-salt storage system and discharged during periods of high demand. Because output can be adjusted, it is being considered a suitable power source for grids that combine data centers and renewable energy.
SK Innovation and TerraPower plan to gradually flesh out a “K-Natrium” business model tailored to Korean conditions by reviewing regulations and power-system conditions in each country. The path is to expand a reactor design proven in the U.S. to Korea and third countries.
First commercial projects have often faced cost overruns. U.S. company NuScale’s Utah project fell through in 2023 because of rising electricity prices. Vogtle Units 3 and 4, a large nuclear project, also ran over schedule and budget.
Industry experts point to repeated construction and standardization as the solution. Small modular reactors are built by manufacturing modules in factories and assembling them on-site. Repeating the same design lowers costs. This is also why HD Hyundai is targeting a system capable of producing two to three reactor vessels per year.
HD Hyundai won a reactor vessel order in December 2024 and is currently manufacturing it. In May, it was selected as the preferred negotiator for core Natrium main equipment. Its large-scale forging and welding expertise, developed in shipbuilding, is being applied to reactor manufacturing.
Doosan Enerbility has been reviewing the manufacturability of first-of-a-kind equipment since December 2024. This is part of a process to lower mass-production costs by reflecting ease of manufacturing from the design stage. The latest review has now led to an actual manufacturing contract, laying the groundwork for participation in follow-on projects.
SK Innovation plans to gain experience in design, construction, and operation at Kemmerer Unit 1 before expanding the business domestically and overseas. The company’s sequence is to first supply data center power through LNG generation and energy storage systems, then deploy small modular reactors as carbon-free baseload power in the medium to long term.
Natrium reactors use high-assay low-enriched uranium (HALEU) as fuel. Russia has effectively monopolized supply of this fuel. TerraPower also delayed its planned start date by two years after fuel-supply disruptions following the war in Ukraine. The U.S. is increasing domestic production, but volumes remain at an early stage.
Korea’s licensing framework is designed for large nuclear reactors. Industry observers say that review standards, site requirements, and public acceptance discussions tailored to small modular reactors are needed. There is also a view that this should be linked with the government’s ongoing program for an innovative small modular reactor.
Financial support is another challenge. It is argued that first-of-a-kind projects are difficult to finance with private capital alone. The U.S. government is said to share about half of the Kemmerer project cost through the Department of Energy’s demonstration program. To win follow-on projects, Korean companies will likely need support combining export finance and guarantees.
Workforce shortages are also an issue. The number of university students majoring in nuclear engineering in Korea has fallen over the past decade. Sodium-cooled systems and new fuel types differ from conventional light-water reactor designs. Experts say companies and universities should work together to train specialists in Generation IV reactors.
Industry watchers are focusing on the learning effect from repeated construction. Even if first-of-a-kind profitability is low, accumulated construction data can improve the cost structure. The shipbuilding industry’s example of lowering costs by repeatedly building standard hull designs is often cited. The first U.S. project could become a credential in subsequent bids in Europe and Asia.
If Kemmerer Unit 1 begins commercial operation as scheduled in 2031, Korean companies will secure a commercialization track record for Generation IV reactors. If the schedule slips, the payback period on investment will also be delayed. The advantage of securing the supply chain is expected to depend on the success of the first unit.