The Westinghouse-Kepco Suit

In the Free World, the Korean APR1400 nuclear plant has no real competition. The Koreans have shown that they can build APR1400's domestically at less than $2500/kW overnight CAPEX. They built four APR1400's in the UAE under difficult circumstances for about $4500/kW. The design is certified by the NRC and has a good operating history.

Meanwhile, Westinghouse is struggling to complete two AP1000's for $15,000/kW at Vogtle. The design has been plagued with Reactor Coolant Pump issues. The Chinese have pretty much abandoned it for their own design.

The French EPR is if anything worse. The design is horribly difficult to build. It has run into feedwater pump problems and some very serious materials issues. The first EPR in China ran into fuel element failures. The French are now working on a ``simplified" EPR+ as a replacement.

The Poles recognize they must have nuclear. Westinghouse, despite the AP1000's dismal record, assumed they had the inside track thanks to the Poland's dependence on the US military. The Poles played a cute game encouraging Westinghouse, but then also asking the Koreans for a quote. Reportedly, Westinghouse offered six AP1000's for $31.3 billion or $4700/kW. The Korean outfit, Kepco, came in at $26.7 billion for six APR1400's or $3200/kW. Westinghouse knew it could not compete, so it did what Americans do best. It took Kepco to court.

The APR1400 is based on the Combustion Engineering (CE) System 80+ design. In 1997, Kepco licensed that design.The Koreans demanded and got a Total Technology Transfer Agreement. No strings attached. They could use the IP anyway they wanted. CE's back was against the wall. They had become embroiled in an asbestos suit, and were going bankrupt. The cash from the Koreans kept CE alive for another couple of years. In 2000, Westinghouse acquired CE and became the licensor. Kepco has bought the unfettered right to use the System 80+ IP. How can Westinghouse keep them from exercising that right?

Here's the clever part. The System 80+ IP is American nuclear technology. No one can export any American nuclear technology without complying with the Atomic Energy Act, Part 810. You cannot even send any non-public information about your design to a potential customer (or vendor) without complying with Part 810. For countries that have signed 123 Agreements with the US, which is the case for Poland and Czech Republic via their membership in Euratom, Part 810 only requires that the Department of Energy be fully informed of the exchange of information.

Kepco attempted to comply with Part 810 by sending the DOE a letter telling them they were exchanging 810 information with the Poles. The DOE rejected the letter on the grounds that Kepco was not the owner of the American technology and such a letter had to be signed by "American persons". Westinghouse has declined to sent the Part 810 letter on behalf of Kepco.

Westinghouse's suit alleges that Kepco is sending APR1400 technical information to the Poles (and the Czechs) anyway, as part of its marketing. This makes Westinghouse the aggrieved party, since as licensor they are legally responsible for complying with Part 810. The vision is Westinghouse execs thrown in jail for Kepco's violation of Part 810.

So the whole thing hinges on a paperwork violation of an American IP export control by a Korean company, despite the company's demonstrated willingness to comply with Part 810. Westinghouse and the DOE are willing to screw humanity and the planet, and hand the future of nuclear power over to Russia and China on a technicality they concocted.

25 years on the APR1400 looks rather different from the System 80+. The turbine hall and fuel handling system are totally different. The spherical containment is gone. The core catcher is different. The APR1400 incorporates a clever passive device for controlling emergency core injection flow. Just about every component has been reworked and improved by the Koreans.

Nonetheless legally the Koreans are in a weak position. In the past they have admitted that the APR1400 is derived from the System 80, and conceded the need for Westinghouse to do the Part 810 paperwork. So here's what I would do if I were Kepco. I'd unveil the KOR1500 (aka APR+), a fully domestic design, and sell it to whomever I wanted to. If the KOR1500 looks a lot like the APR1400, that's merely coincidence.