Seoul: SK Innovation Co., South Korea's leading refiner, announced that it has sold part of its stake in TerraPower, a U.S. developer of next-generation small modular reactors (SMRs), to Korea Hydro and Nuclear Power (KHNP). This move is aimed at strengthening their three-way partnership to expand into the global SMR market.
According to Yonhap News Agency, this deal marks the first instance of a Korean public energy company directly investing in a leading global SMR developer. In a press release, SK Innovation noted that in August 2022, it had partnered with SK Corp. to invest 350 billion won (US$250 million) in TerraPower, making them the second-largest shareholder. The recent sale will not affect SK Innovation's status as the second-largest shareholder in the company founded by Microsoft co-founder Bill Gates in 2008.
TerraPower is currently working on the world's first commercial SMR plant in Wyoming, expected to be completed by 2030. The plant will utilize TerraPower's Natrium reactor technology, which incorporates advanced energy storage systems. This SMR technology is seen as a transformative solution to power shortages exacerbated by the rapid growth of the artificial intelligence (AI) industry.
Kim Moo-hwan, executive vice president and head of SK Innovation's Energy Solution Business Division, emphasized the importance of KHNP's investment, stating, "KHNP's investment in TerraPower strengthens our three-way collaboration in the global SMR business." He added that SK Innovation will collaborate closely with KHNP to support the Wyoming project, explore international SMR opportunities, and achieve innovative outcomes, including localizing key materials and components.
The companies plan to gradually ink agreements to construct SMRs in the United States and other nations, introduce SMRs in South Korea, and enhance cooperation to expand global SMR supply chains. Their collaboration began in April 2023 with an initial agreement aimed at SMR development and demonstration to enlarge the global SMR supply chain.
SMRs offer significant advantages by reducing construction time and costs through modular designs and allowing phased expansion to meet increasing electricity demand.