Project Manager of Project Department Nuclear Power Program in Korea December, 2004 Good morning, ladies & gentlemen. I am Dae-Jong Ro, Project Manager at Korea Hydro and Nuclear Power’s Project Department. It is my great pleasure to have this opportunity to share with you today the current status of the Korean Nuclear Power industry. Ro, Dae-Jong Project Manager of Project Department

Overview Current Status of Electric Power Nuclear Power Plants Nuclear Power Development Reactor Models under Construction International Cooperation and R&D This presentation  is divided into 4 sections. I will begin by introducing the “Status of Electric Power in Korea”. Next, I am going to talk about the construction and operation of nuclear power plants in Korea. Then, after taking a look at Korea’s experience in nuclear power development, I will briefly introduce the technical information on the Korean Standard and the Advanced Power Reactors under construction in Korea. And, lastly I am going to make a short introduction about the general status of international cooperation and R&D. 1

Current Status of Electric Power Rapid Increase in Electricity Demand About 9 times in the past 23 years, from 1980 to 2003, with an average annual growth rate of 10.3% Anticipated average annual growth rate of electricity demand through 2015 is 3.3% Scarcity of Domestic Natural Resources No crude oil production Little natural gas Limited hydro power Limited utilization of coal Electricity demand in Korea has increased a staggering 900 percent in the past 24 years from 1980 to 2003, with an average annual growth rate of 10.3%. The anticipated average annual growth rate through 2015 has been pegged at 3.3%. However, natural resources of Korea are scarce. We have no crude oil production, little natural gas, limited hydro power and limited utilization of coal. 2

Current Status of Electric Power Installed Capacity Electricity Generation 3,877 6,011 15,716 6,887 39,091 26,526 129,672 14,518 56,053 This slide shows Korea’s current electric power status. As of the end of 2003, the total installed generating capacity reached over 56 thousand MW, and electricity generation reached 322 thousand GWh. Installed nuclear capacity is 15,716 MW, as of the end of 2003, representing 28% of the country's total installed capacity. Also, nuclear power generation in 2003 reached about 130 billion kWh, representing 40% of the country's total electricity generation. 120,276 Total: 56,053 MW Total: 322,452 GWh (As of the end of 2003) 3

Current Status of Electric Power Long-term Power Development Plan (MW,%) 85,440 81,440 7.8% 6,700 3.8% 56,053 3,210 27.1% 6.9% 23,150 10.7% 25.9% 30.1% 25,740 28.4% According to the government’s long-term power development plan, established in August 2002, the installed generation capacity will reach about 85,000 MW by the year 2015. Nuclear power will become the largest source of power generation, 31%, and the percentage of oil-fired power will decrease dramatically. 31.2% 28.1% 26,640 4

Nuclear Power Plants Site Kori Ulchin 5 Wolsong Units (Gen. Capacity, MW) Site Operation Construct. Pre-const. Total Kori 4 (3,137) 2 (2,000) 2 (2,800) 8 (7,937) Wolsong 4 (2,779) - 6 (4,779) Yonggwang 6 (5,900) Ulchin 5 (4,900) 1 (1,000) 19 (16,716) 5 (5,000) 26 (24,516) Kumho (#1,2) Ulchin (#1,2,3,4,5,6) Since starting commercial operations at Kori Unit 1 in 1978, Korea has achieved rapid growth in nuclear power. Today, a total of 19 nuclear units are in operation, the latest being Ulchin Unit 5, which went online in July of this year. There are also another 7 units under construction and in the pre-contracting stage. This slide shows the location of Korea’s nuclear power plants. There are 4 nuclear power generation sites in Korea: namely Kori, Yonggwang, Wolsong and Ulchin. As I already mentioned, 19 nuclear Units are in operation, with a total generation capacity of 16,716 MW. Among these plants: 15 units are PWRs: Pressurized Light Water Reactors, and 4 units are PHWRs: Pressurized Heavy Water Reactors. Ulchin #6, Shin-Kori #1&2 and Shin-Wolsong #1&2 are presently under construction. Shin-Kori #3&4 are in the pre-contracting stage. (as of the end of Nov, 2004) Yonggwang (#1,2,3,4,5,6) Wolsong (1,2,3,4), Shin-Wolsong (#1,2) Kori (#1,2,3,4), Shin-Kori (#1,2,3,4) 5

Nuclear Power Plants Operational Performance 6 Trips/Unit Capacity Factor(%) Trips/Unit 2 1.5 1.0 Trip 0.5 This graph shows the trend of operational performance of Korea’s nuclear power plants, along with the average capacity factor and the average unplanned trips per unit. The capacity factor is an important measure of a unit’s reliability. The capacity factor specifically considers the energy that is generated during a defined period of time with no allowances for lost generation. The average capacity factor for Korea’s nuclear power plants was 94.2% in 2003. Compare this to a target set by INPO (that is, the Institute of Nuclear Power Operations) of 87% and an worldwide average of 76.5%. As you can see, KHNP, boasts remarkably higher capacity factors than the world average. Last year, Kori Unit 3 recorded the highest capacity factor among the 436 nuclear power plants operating throughout the world. We have been ranked No 1 in the world in Capacity Factor 23 times since 1985. Unplanned Trips per Unit have been relatively stable for the last few years. Last year, unplanned trips occurred only 11 times among our 18 operating NPPs. The frequency per unit was 0.6 last year. Such outstanding operational statistics are the result of the continuous accumulation of technologies and our emphasis on training and safety. ※ Ranked No. 1,2 & 4 in C.F. Worldwide in 2003 (Nucleonics Week, Feb. 2003) - No 1 : Kori #3 (PWR, 950MW) : 104.80% - No 2 : Ulchin #3 (PWR, 1,000MW) : 104.42% - No 4 : Yonggwang #4(PWR, 1,000MW) : 102.93 % 6

Nuclear Power Development Evolution of Project Structure 1970’s 1980’s 1990’s 1st Generation 2nd Generation 3rd Generation This slide shows the evolution of project structure from the 70’s to the 90’s. The 70’s was the era of technological dependency. 3 units were constructed by Foreign Contractors on a Turnkey basis. Local participation was very limited. In the 80’s, a non turn-key approach was adopted for the KRN 3&4 project. The primary objective of the new approach was cost-saving through a competitive bidding process and maximization of local participation. KHNP assumed the responsibility for direct management of the projects with technical consultation provided by a foreign company. Through construction of 6 Nuclear Power Plants, KHNP & Korea nuclear industries have accumulated project management experience and design & manufacturing technology. In the 90’s, YGN 3&4 acted as the basic model of the Korean Standard Nuclear Power Plant (KSNP), and Nuclear Power Plants have been built by Korean companies which bore full responsibility as the prime contractors afterwards. Turnkey Non-Turnkey Non-Turnkey KRN #1,2 WSN #1 KRN #3,4, YGN #1,2, UCN #1,2 YGN #3,4 UCN #3,4 Foreign Contractor Local Labor Supply Foreign Prime Contractors Local Subcontractors Local Prime Contractors Foreign Subcontractors Technological Dependency Technology Acquisition Technological Self-Reliance 7

Nuclear Power Development Long-term Plan of Nuclear Power Development 2010 2005 2000 1995 1990 2015 Ulchin 3&4 1998 / 1999 2002 Yonggwang 3&4 1995 / 1996 Yonggwang 5&6 Ulchin 5&6 Shin-Kori 3&4 2004 / 2005 Shin-Kori 1& 2 2010 / 2011 2012 / 2013 APR 1400 3rd & 4th 2014 / 2015 APR 1400 Nth APR 1400 Development Shin-Wolsong 1& 2 2011 / 2012 KSNP KSNP+ APR 1400 This chart summarizes the overall status and future construction plan for Korea’s nuclear power plants. Yonggwang 3&4, the inaugural project of the KSNP design, went into commercial operation in 1995 and 1996, respectively. The final KSNP project is underway at the Ulchin site. Ulchin Unit 5 has been in service since this July, and Unit 6 will be completed next year. As for the KSNP+ design, Shin-Kori 1&2 will be completed in 2010 & 2011, and Shin-Wolsong 1&2 in 2011 & 2012, respectively. The design of the Shin-Kori 3&4 project is an advanced nuclear power plant called APR1400, which stands for “Advanced Power Reactor 1400”. These twin reactors are scheduled to be completed by 2013. 8

Reactor Models under Construction KSNP (Korean Standard Nuclear Power Plant) Design Characteristics 2 Loop RCS Design Power Level: 1,050MWe / 2,825MWt Plant Design Life: 40 years Plant Availability: 80~87% Design Features Human Factor Engineering Designed to Avoid Severe Accidents Leak-Before-Break (LBB) Concept Increased Operability and Maintainability Lower Occupational Radiation Exposure The KSNP reactor is a Pressurized Light Water Reactor with two closed loops in the primary coolant system. The NSSS consists of one reactor, two steam generators, four reactor coolant pumps and one pressurizer. Its capacity is 1,050 MWe at the generator end, with a thermal output of 2,825 MWth from the NSSS. The design life is 40 years, with a life-time average availability factor of 80 to 87 percent. The major advanced design features of KSNP are: Human factor engineering, Design to mitigate severe accidents, The leak before break (LBB) concept, Increased operability and maintainability, and Low occupational radiation exposure. 9

Reactor Models under Construction KSNP+ (Korean Standard Nuclear Power Plant Plus) Highlights Evolutionary model based on proven performance & safety of KSNP Optimized technologies and O&M experience Advanced Design Features Optimization of Plant Arrangement & Plant Site Optimization of System Design & Equipment Capacity Reduction of Occupational Radiation Exposure Application of Steel-Concrete Composite Structure The KSNP+ reactor is a evolutionary model based on the proven performance and safety of the KSNP. It utilizes optimized technologies and operating & maintenance experience acquired from nuclear power plants operating and under construction. The major advanced design features of KSNP+ are : Optimization of plant arrangement & the plant site, Optimization of system design & equipment capacity, Reduction of occupational radiation exposure, and the Application of a steel-concrete composite structure. 10

Reactor Models under Construction APR1400 (Advanced Power Reactor 1400) Design Characteristics Power Level: 1,400MWe / 4,000MWt Plant Design Life: 60 years Plant Availability: at least 90% Advanced Design Features Fully Digitalized Man-Machine Interface 4-Train Safety System including Direct Vessel Injection & In-containment Refueling Water Storage Tank External Reactor Vessel Cooling System The APR 1400 is an advanced version of the proven KSNP design with upgraded power, enhanced safety and improved performance. Its capacity is 1,400 MWe at the generator end with a thermal output of 4,000 MWth from NSSS. The design life is sixty years with a lifetime average availability factor of at least ninety percent. The major advanced design features of APR 1400 are : A Fully Digitalized Man-Machine Interface, Direct Vessel Injection, an In-containment Refueling Water Storage Tank, and An External Reactor Vessel Cooling System. 11

International Cooperation and R&D GIF (Gen IV International Forum) : 11 member countries Korea’s participation in GIF: 4 Concepts SFR (Sodium-cooled Fast Reactor) VHTR (Very High-Temperature Reactor) SCWR (Supercritical Water-Cooled Rx) GFR (Gas-cooled Fast Rx system) – partial participation ITER (International Thermonuclear Experimental Rx) : 6 member countries KSTAR (Korea Superconducting Tokamak Advanced Research) To serve as a “pilot plant” of ITER : will be completed by August 2007 Basic design completed, manufacturing & assembling in progress : 80% complete at present. I’d like now to introduce Korea’s international cooperation and R&D participation program. As you know, the Gen IV International Forum, joining together 11 member countries, plans to make Gen IVs available for international deployment around the year 2030, when many of the world’s currently operating nuclear power plants will be at or near the end of their operating licenses. The four key technical objectives of Gen IV are Sustainability, Economics, Safety & Reliability and Proliferation-Resistance & Physical Protection. Korea is participating in the Sodium-cooled Fast Reactor (SFR), VHTR, SuperCritical Water-cooled Reactor (SCWR) and partially in the Gas-cooled Fast Reactor (GFR). (SFR-소듐냉각고속로, SCWR-초임계압수냉각원자로, GRF-가스냉각고속로) In June, 2003, Korea participated in the ITER, International Thermonuclear Experimental Reactor. Especially, the K-STAR is to serve as an ITER pilot plant, and scheduled to be completed by August 2007. Basic and engineering design have been finished until last year, and now the installation of equipment is underway. The project is now 80% complete. 12

International Cooperation and R&D Hydrogen Production System using Nuclear Power Objective To supply 20% of domestic transportation fuel by 2020 using 3.3 million tons of hydrogen (equivalent to 85 million tons of petroleum) R&D Organizations KAERI : development of Very High Temperature Reactor KIER (Korea Institute of Energy Research) & KAIST : development of hydrogen production technology SMART (System-Integrated Modular Advanced Reactor) To develop small-sized system-integrated PWR for power generation and seawater desalination R&D Activities 1st (Concept) and 2nd (Basic Design) Stages : completed by 2002 3rd (License application & pilot plant construction) : ~ 2008 To fulfill its goal of supplying 20% of domestic transportation fuel in 2020 with hydrogen, Korea has begun to develop a Hydrogen Production System utilizing Nuclear Power, beginning this year and will be completed in 2019. Three R&D organizations are involved in the development of the very high temperature reactor (VHTR) & hydrogen production technology: KAERI for VHTR, KIER & KAIST for hydrogen production technology. For power generation and seawater desalination, a 90MWe class SMART reactor is currently in development. Concept & basic design have been finalized, and licensing application & pilot plant construction is in progress, scheduled to be completed by 2008. 13