SK Innovation will expand cooperation with U.S.-based TerraPower on next-generation small modular reactor (SMR) projects. The company will take part in the demonstration reactor underway in the United States and subsequent commercial projects, while in Korea it plans to flesh out the direction for pushing the Korean business model "K-Sodium" and ways to use the domestic nuclear power supply chain.
SK Innovation said on the 14th in Seoul that CEO Choo Hyeong-wook and TerraPower CEO Chris Levesque met and signed a key terms agreement for cooperation on sodium SMR projects and entry into global markets. SK Innovation and SK Co. jointly invested a total of $250 million in TerraPower in 2022 to become the second-largest shareholders.
The agreement includes items such as expanding SK Innovation's participation in TerraPower's SMR demonstration reactor under construction in the United States and follow-up commercial projects, plans to leverage the domestic SMR supply chain, development of a domestic sodium SMR business, and joint identification of global projects.
The two companies plan to progressively specify the direction for advancing the "K-Sodium" business model by reviewing each country's regulations and industrial and power-system conditions. They will also consider expanding the participation of domestic research and design institutions and nuclear and power equipment corporations to utilize the domestic supply chain for key sodium SMR equipment and to establish a Korean-style design and project execution system.
SK Innovation also plans to expand participation in TerraPower's "Kemmerer Unit 1" project underway in Wyoming and in subsequent commercial projects. After receiving from the U.S. Nuclear Regulatory Commission (NRC) in March approval to build the first commercial advanced reactor in the United States, the Kemmerer Unit 1 project has been moving forward.
By taking part in the U.S. demonstration project, SK Innovation aims to secure experience in the design, construction and operation of next-generation nuclear power plants and use it to assess applicability in Korea and to develop global projects. The company is also considering expanding SMR project development and operations in Asian markets such as Vietnam, Indonesia and Malaysia, as well as in Korea and the United States. The two sides plan to jointly identify U.S. projects that can be linked to Korean and U.S. policy and financial support, and to specify business feasibility reviews, financing, supply chain configuration, and construction and operation plans.
The sodium SMR is a reactor based on a Generation IV sodium-cooled fast reactor (SFR) developed by TerraPower. It combines the reactor with a molten-salt-based thermal energy storage system (TES), designed to store heat produced by the reactor and use it during hours of high electricity demand.
SK Innovation is also pursuing a business that combines SMRs with its existing direct LNG imports, LNG power generation and power businesses, as well as SK On's battery and energy storage system (ESS) operations. In the short term, it plans to use LNG power generation and ESS to meet the initial electricity demand of AI data centers and industrial complexes, and in the mid to long term to supply SMRs as carbon-free baseload power.
SK Group Chairman Chey Tae-won and TerraPower Board Chair Bill Gates also attended the dinner held after the signing of the agreement. The two discussed responding to power demand driven by the spread of AI data centers, the development direction of the next-generation nuclear industry, and the potential for Korea-U.S. nuclear cooperation.
SK Group is pursuing an "AI full stack" strategy that builds a supply chain of semiconductors, data centers, power and storage needed for AI data centers by linking SK hynix's AI Semiconductor, SK Telecom's data centers and AI infrastructure, SK Innovation's LNG, power and SMRs, and SK On's ESS batteries.
CEO Choo said, "This agreement is meaningful in that SK Innovation and TerraPower will assess the potential for domestic application of sodium SMRs to meet AI data center power demand and will cooperate to expand global business," adding, "While communicating closely with TerraPower, we will specify the direction for advancing the K-Sodium business model, and by participating in future U.S. projects we will secure business development and operational capabilities to expand our entry into global markets."