With Kori Nuclear Power Plant Unit 2, which had been halted for 2 years and 7 months, receiving approval for a lifespan extension on the 13th, the levelized cost of electricity (LCOE), an indicator of a plant's "cost-effectiveness," is expected to improve in a positive direction.
The levelized cost of electricity is the value obtained by dividing the total expense of building and operating a power plant from construction to shutdown by the electricity generated by the plant. Expressed in dollars per megawatt-hour (MWh), the lower the LCOE, the more efficient the plant. That is because it means the expense to generate 1 MWh is lower. Although nuclear plants have relatively high construction expense, their fuel expense is low, so the longer the operating period, the more generation increases, producing a reduction effect in the LCOE.
According to the nuclear industry on the 17th, Kori Unit 2 was built at a cost of 591.6 billion won (foreign funds $540 million, domestic funds 280.5 billion won) based on its May 1977 groundbreaking. With Kori Unit 2 now able to operate additionally through Apr. 8, 2033, it can generate that much more electricity, and the LCOE falls. Considering the massive expense put into constructing the plant, it is the more efficient choice.
◇ LCOE of Kori Unit 1, Korea's first "continued operation" reactor, lower than new large reactors
It has already been proven that continued operation of nuclear plants lowers the LCOE. According to the report "Utility of Continued Operation of Nuclear Power Plants and Institutional Improvement Plans," published in 2024 by the Korea Atomic Energy Research Institute (KAERI), the LCOE of Kori Unit 1, Korea's first continued-operation reactor, was $21 per MWh, lower not only than building a new large reactor ($36 per MWh) but also than coal power ($48 per MWh) and liquefied natural gas (LNG) combined cycle power ($90 per MWh).
Lee Ki-bok, president of the Nuclear Society and author of the report, said, "During the initial 30 years of Kori Unit 1's operation, construction expense was included in the generation cost, so during the continued-operation period, only facility improvement expense, fuel expense, and labor expense are incurred," adding, "During continued operation, the effect of a lower LCOE appears."
The Nuclear Energy Agency (NEA) under the Organization for Economic Cooperation and Development (OECD) presented similar findings. In its "Projected Costs of Generating Electricity 2020" report, the NEA calculated that, assuming a 20-year life extension for a pressurized water reactor like Kori Unit 2 (a method that pressurizes high-temperature water to produce steam), the LCOE would be about $30–$50 per 1 MWh when factoring in refurbishment expense and generation.
The NEA said, "Long-term operation of nuclear plants is economical because construction expense, which accounts for 80% of nuclear investment, is significantly reduced," adding, "Electricity produced by long-term operation of existing reactors is highly competitive and is the cheapest option, not only compared with building new reactors but also compared with all power generation."
The LCOE of nuclear power is smaller than that of renewable energy. According to an analysis by Bloomberg New Energy Finance (BNEF) in September, as of 2024, Korea's solar LCOE was $98 per 1 MWh, more expensive than continued operation ($21 per 1 MWh) as well as new large reactors ($36 per 1 MWh). It is 2.8 times the global average ($35 per 1 MWh).
The LCOE of wind power was even higher than solar. Korea's onshore wind LCOE was $126 per 1 MWh, 3.4 times the global average ($37 per 1 MWh). Offshore wind LCOE was $300 per 1 MWh, 3.7 times the global average ($79 per 1 MWh).
◇ Korea approves continued operation in 10-year increments… less economical than 20-year increments
In Korea, continued-operation approvals for nuclear plants are granted in 10-year increments, but the actual operating period is even shorter. If reviews are delayed and a conclusion is not reached by the license expiration date, the plant is shut down. Unlike Korea, the United States approves continued operation in 20-year increments to minimize shutdowns and allows temporary operation even after the license expiration date.
Chung Yong-hoon, a professor of nuclear and quantum engineering at KAIST, said, "If Korea also extended the approval unit to 20 years, even if a plant like Kori Unit 2 stops after license expiration because the review alone takes nearly three years, 20 years would be guaranteed, and the actual operating period could be longer."
From the perspective of recouping facility investment expense, 20 years is more favorable than 10 years. Korea Hydro & Nuclear Power Co. (KHNP) has budgeted 310 billion won (including 130 billion won for regional coexistence) as new investment for the Kori Unit 2 life extension. Typically, facility investment is made in a lump-sum expenditure. Even with the same expense, if the payback period doubles, the LCOE of nuclear power falls and becomes more economical. A KHNP official said, "Many facilities have lifespans longer than 10 years. Using them for 20 years reduces facility investment expense."
Approving continued operation in 20-year increments would also reduce administrative expense. This is because administrative procedures repeated every 10 years, such as periodic safety review (PSR) and licensing reviews, can be halved. KHNP submits a PSR report to the Korea Institute of Nuclear Safety (KINS), the regulatory body, for review. Based on this report, the Nuclear Safety and Security Commission decides whether to allow continued operation of the plant. The review fee is known to be around 2 billion won. KHNP also incurs separate expense to prepare the report. Although negligible compared with massive facility investment, it can reduce administrative waste such as budget and personnel.
◇ Nuclear construction costs rising, extensions more economical than decommissioning or new builds
Nuclear construction expense has been rising year by year. Overall construction costs have increased, alongside additional safety installations for nuclear and strengthened regulatory requirements. Considering the increase in nuclear construction expense, extending the life of existing reactors is more economical than shutting them down and building new reactors to supply the resulting shortfall in electricity.
The construction expense for Kori Unit 1, Korea's first commercial reactor, was 156 billion won when construction began in 1971, about 3.6 times the construction expense of the Gyeongbu Expressway (42.8 billion won). The construction expense for Shin-Hanul Units 3 and 4 in Uljin, North Gyeongsang, which received construction approval in 2024 and are now being built, also amounts to about 11.6 trillion–11.7 trillion won. That means the construction expense per unit alone is 5.8 trillion–5.85 trillion won.
The maintenance expense for Kori Unit 1, based on when it was in operation, was about 80 billion–100 billion won per year. That is incomparably cheaper than new construction. In addition, if decommissioning is decided for a shut-down reactor, decommissioning expense is added, which is also a factor. Kori Unit 1 is the second commercial reactor in the world to enter decommissioning after the United States. The decommissioning work alone is expected to require 1.0713 trillion won (807.8 billion won for decommissioning work, 262.5 billion won for waste disposal).
EU data also show that extending the life of existing reactors yields expense savings compared with building new ones. The European Commission set a plan in June to expand nuclear generation capacity from the current 98 gigawatts (GW) to 109 GW by 2050. To do this with new reactors would require an investment of 205 billion euros, but extending the life of existing reactors would cost 36 billion euros, including both public and sensitive funds. Building new reactors requires 5.6 times the funding needed for life extension.
The International Atomic Energy Agency (IAEA) said, "The expense of extending the life of nuclear plants is only 25–50% of the expense of building new reactors, making nuclear the most cost-efficient method," adding, "Nuclear fuel expense is also generally lower than fossil fuels, so by improving major systems such as steam generators, turbines, and safety devices, the efficiency of existing reactors can be increased to reduce expense."
◇ Global trend of "extending nuclear lifespans," 10-year extension generates enough low-carbon power for one year of global electricity demand
Extending the lifespan of nuclear plants has already become a global trend. As of December last year, 204 of the 439 reactors operating worldwide (46%) were in use beyond their design lives.
The International Atomic Energy Agency (IAEA) projected in 2020 that extending the lifespan of nuclear power plants worldwide by 10 years would produce 26,000 terawatt-hours (TWh) of low-carbon electricity. This is more than half the electricity generated by nuclear plants over the past 40 years and is roughly equivalent to about one year of current global electricity demand.
Extending the lifespan of nuclear power plants also helps reduce carbon dioxide emissions while the world expands low-carbon generation capacity. Continued operation also makes reactors safer. That is because ongoing facility upgrades and reinforcement of safety systems are carried out for long-term operation and continued operation.
In the case of Kori Unit 1, although unplanned shutdowns occurred frequently in the early years after commercial operation began in 1978, they decreased as the years of operation increased. In particular, from 2008, when continued operation began, until permanent closure, there were only two unplanned shutdowns.
Lee Ki-bok, president of the Nuclear Society, said, "People usually say old reactors are dangerous, but that is not the case. To continue operating, you spend hundreds of billions of won to replace parts with new ones, supplement facilities, and pass safety reviews with higher standards. Making it withstand 20 years is more demanding than making it withstand 10. The longer the operating period, the safer reactors become."