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Residents of Ulsan’s Seosaeng township have a meeting with Korea Hydro & Nuclear Power executives including CEO Lee Gwan-seob

In a strange turn of events, one of the same residents of Ulsan‘s Seosaeng township who led a recent, brute-force battle to oppose the halt on construction of Shin-Kori Nuclear Power Plant reactors 5 and 6, was on the anti-nuclear power side fighting for survival rights as recently as 2005 when reactors 1-4 were being built. How did the survival battle by residents of areas with nuclear power plant transform from opposition to the plants into an all-out battle to oppose the halt on construction and a move away from nuclear and coal-fired power? What factors have been underlying this shift?

On the surface, the message on the local residents’ banner is clear: an end to nuclear power will mean “a disaster for local employment and economies.” The job issue is obviously a real one. The building of Shin-Kori reactors 5 and 6 followed a principle of shared growth with the region: local residents would be given priority consideration when hiring construction workers and during planned maintenance periods. It’s also the reason concerns about a possible economic downturn for nearby commercial neighborhoods are rather reasonably founded.

But while it is not so apparent on the surface, money and financial interests have also been a central factor in the strange behavior of local residents. Last year, Kori Nuclear Power Plant established a 82.3 billion-won (US$73.6 million) “surrounding region assistance fund” to provide support. The money has been used for education and scholarships for individual households in the region, culture promotion efforts, and health and medical, internet, and residential electricity costs. It also goes into construction and improvement of various forms of local public facilities.

The roots of the support fund lie in the Act on Assistance to Electric Power Plants-Neighboring Areas. Enacted in 2005, the law mandates the procurement and use of funds for basic assistance projects to residents living within five kilometers of nuclear or coal-fired power plants. Special assistance is also provided in areas where plants are under construction. The basic assistance project costs are provided not only when the plants are being built, but also when they are in operation. Instead of simply providing compensation for declining property values due to the presence of nuclear power plants, they function instead as a kind of permanent rent.

The support costs are calculated annually by multiplying the total output from two years prior in kilowatt-hours by an “assistance unit cost” for each power source: 0.25 won (US$0.0022) per kilowatt-hour for nuclear power, 0.15 won (US$0.0013) for bituminous coal, and 0.1 won (US$0.0009) for environmentally friendly liquefied natural gas (LNG) and new/renewable energy sources. It’s a system designed so that the amount of support rises or falls in precise proportion to the amount of power actually produced at the plants. As a base-load generation source, nuclear power is in full operation 24 hours a day. In addition to the high output, the unit cost is also high - providing a strong incentive for residents to keep the nuclear power plants in place. A few years ago, one of the residents leading the battle to oppose the halt to construction on Shin-Kori reactors 5 and 6 was reported as saying, “The region is being offered an opportunity for new development thanks to all the assistance coming from the nuclear power plant.”

While the support system for areas around nuclear power plants was first introduced in the 1990s, it was with the introduction of the power source unit cost approach in 2005 that total annual assistance nearly tripled. A source with the Ministry of Trade, Industry and Energy said it was “impossible to know what the standard for calculating the different unit costs was at the time of enactment because no records have survived.” The source of the basic assistance project costs is the Electric Power Industry Basis Fund, which includes electricity charges paid by consumers. In addition to the basic assistance project costs, nuclear power plant operators will need to establish a business operator support project fund with an equivalent amount to use for local assistance.

Last year, the roughly 6,200 residents living around Yeongheung Power Station in Incheon’s Yeongheung township received a total of 6 billion won (US$5.4 million) in assistance from the station. The money was used to pay for their children’s university tuition, scholarships, and field trip costs.

“The new administration is talking about policies to move away from coal-fired power and shift toward LNG-powered plants, and the residents are opposed to that,” said a source at Yeongheung Power Station.

“A switch to LNG would mean a lower operation rate, which translates into less output and lower unit cost, meaning the assistance will also decrease,” the source explained. This situation of residents being co-opted into support through the carrot of local assistance is happening around nuclear and coal-fired power plants nationwide.

By Cho Kye-wan, staff reporter

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