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(News Focus) Energy policy, optics of watchdog autonomy at stake in politically sensitive reactor audit

All News 17:11 October 13, 2020

By Chang Dong-woo

SEOUL, Oct. 13 (Yonhap) -- Although overshadowed by more pressing matters at hand such as the new coronavirus or regional security, the closure of South Korea's second-oldest nuclear reactor has remained a hot-button topic in domestic politics since President Moon Jae-in decided in 2017 to decommission the reactor earlier than scheduled in line with his energy policy.

And while retired for nearly a year now, the Wolsong-1 reactor, located 370 kilometers south of Seoul in Gyeongju, is again poised to make headlines, as the state inspection watchdog is wrapping up an audit on whether the decision by the nuclear energy and safety authorities in executing Moon's pledge was based on unbiased research as opposed to being predetermined.

This file photo taken on Feb 27, 2020, shows the now-decommissioned Wolsong-1 nuclear reactor in Gyeongju, 370 kilometers southeast of Seoul. (Yonhap)

Commissioners of the Board of Audit and Inspection (BAI) on Tuesday convened its latest round of meetings to review the agency's audit on Wolsong-1's closure.

The shutdown was part of Moon's broad green energy plan aimed at gradually closing atomic power plants and increasing the ratio of renewable energy to 20 percent by 2030. In 2018, the Korea Hydro & Nuclear Power Co. (KHNP) decided to decommission Wolsong-1, and the plan was approved by the Nuclear Safety and Security Commission in December of last year.

To be clear, the initial 30-year operational life cycle of Wolsong-1 ended in 2012 but was extended during the past conservative Park Geun-hye administration for another 10 years to 2022. Until its early closure during the Moon administration, Wolsong-1 was the nation's oldest reactor after Kori-1, which was retired in June 2017.

After a heated backlash from opposition lawmakers and nuclear energy proponents, the National Assembly in September commissioned BAI to look into KHNP's assessment in shutting down the reactor.

BAI was required to submit a final report to parliament within a five-month period that ended on Feb. 29 but has been overdue on its deadline -- nearly eight months and counting -- drawing criticism from those on both sides of the debate.

Undoubtedly BAI's six-member commissioner committee led by agency head Choe Jae-hyeong is aware of the political sensitivity surrounding the audit, as back-to-back marathon meetings since Wednesday have yet managed to produce a unanimous conclusion.

Choe Jae-hyeong, head of the Board of Audit and Inspection, speaks at the National Assembly in Seoul on Sept. 1, 2020. (Yonhap)

At the crux of the debate lies the question of whether KHNP's projection on Wolsong-1's economic viability was conducted fairly and whether it actually warranted an early shutdown. The state power company assessed that the reactor was losing money due to its low operational rate and rising maintenance costs.

Critics of the administration's energy policy have argued that the KHNP has flip-flopped on its earlier decision to extend the reactor's life cycle -- even claiming that the company had intentionally deflated numbers to lower anticipated profits -- especially after having invested 700 billion won (US$609 million) for repairs between 2009 and 2011.

Cho Seong-jin, an energy professor at Kyungsung University and a former KHNP board member, has also publicly criticized the company's management, claiming that the decision was essentially railroaded without thorough due diligence by the board.

"We were given some 10 to 20 minutes to review the plan. It was impossible for the company to thoroughly explain to us its 50-page economic viability report in the given time," Cho said. The professor also claimed that the board meeting's minutes submitted to parliament were seemingly doctored.

Opponent lawmakers have also argued that the early closure of Wolsong-1 will jack up the electricity purchase costs of the state-run Korea Electric Power Corp. (KEPCO) by a total of 851 billion won.

The government, which oversees KHNP, insists that it has exerted no pressure on the company's assessment on Wolsong-1.

This file photo taken on June 18, 2020, shows opposition lawmakers and members of pro-nuclear civic groups holding a press conference at the National Assembly in Seoul demanding the state inspection agency disclose the results of an audit into the early closure of the Wolsong-1 nuclear reactor. (Yonhap)

"KHNP, through its board meeting, decided to shut down the reactor considering its economic uncertainty as well as the government's policy," Industry Minister Sung Yun-mo said during the ministry's parliamentary audit last week.

Throughout the course of the audit, the political neutrality of the BAI, on whether it can operate free from political pressure as mandated by the Constitution, has also come into question -- especially after ruling party lawmakers demanded the BAI chief's resignation in late July over reports that he criticized government policies during closed-door audit meetings.

Ruling party lawmakers have also claimed that some 70 to 80 percent of the agency's audit report, which hasn't been disclosed to the public yet, is filled with argumentation that favors nuclear energy.

As of now, it's still unclear as to how BAI commissioners will summarize and conclude the audit, but the reactor closure, regardless of the outcome, will most likely emerge as a political lightning rod in the next few days, as the National Assembly's regular audit into the BAI is scheduled for Thursday.


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