The government’s plan to build three new nuclear power plants and complete the 11th Basic Plan for Long-term Electricity Supply and Demand has been thrown into uncertainty. (Image courtesy of Yonhap)
SEOUL, Dec. 16 (Korea Bizwire) – President Yoon Suk Yeol’s ambitious industrial agenda, including a focus on nuclear energy, offshore gas development, and semiconductor industry support, faces potential setbacks following his impeachment by the National Assembly on December 14.
Industry experts warn that any weakening of government semiconductor support could cause South Korea to miss a crucial window for maintaining competitiveness amid intensifying global rivalry.
The government’s plan to build three new nuclear power plants and complete the 11th Basic Plan for Long-term Electricity Supply and Demand has been thrown into uncertainty. The administration had intended to finalize the plan, which includes constructing three large nuclear reactors by 2038 and operating the first small modular reactor by 2035, after parliamentary reporting this month.
However, with President Yoon’s authority diminished and the opposition Democratic Party, which opposes nuclear power, gaining political leverage, the plan may fail to clear parliamentary hurdles. The Democratic Party has criticized the plan for insufficient focus on renewable energy, a global trend.
“While committee reporting is mandatory, all discussions have halted,” a government official said. “It’s difficult to predict how discussions will proceed.”
The political turmoil could also affect the finalization of a nuclear power plant export contract with the Czech Republic, due in March. While Czech authorities maintain their commitment to proceeding with South Korea, political instability could complicate ongoing intellectual property negotiations between Korea Hydro & Nuclear Power and Westinghouse, considered crucial for the deal.
The “Great Whale” gas field development project, which President Yoon had highlighted as a signature achievement, faces immediate challenges after its entire 49.7 billion won initial drilling budget was cut. The government had planned to split the estimated 100 billion won cost between state funding and Korea National Oil Corporation (KNOC).
KNOC will now need to secure full funding through corporate bonds or loans, despite ongoing financial challenges. Industry observers say the results of initial drilling in the first half of next year will be crucial for the project’s future. The government and KNOC estimate they need to drill at least five wells over five years, with a 20% success rate.
Opposition parties have criticized the project’s reliance on consultation from Act Geo, effectively a one-person company, raising concerns about transparency.
The semiconductor industry expressed disappointment as discussions on industry support policies and related legislation have stalled. The Special Act on Semiconductors, which would exempt chip companies from the 52-hour workweek rule and provide subsidies, failed to reach the parliamentary floor on December 10, effectively postponing its passage to next year.
“The semiconductor industry’s global competitiveness requires swift implementation of support measures matching international standards,” said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association.
The petrochemical industry, facing a downturn due to weak global demand and Chinese oversupply, is also watching how the impeachment might affect government restructuring support measures. The planned mid-December announcement of industry support policies, including financial assistance and merger incentives, has been postponed.
“Government support makes a significant difference,” an industry official said. “Given the petrochemical industry’s importance to regional economies, delays in policy implementation could have broader economic implications.”
M. H. Lee (mhlee@koreabizwire.com)
