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Cablegate: Seoul Esth Update - December 2009

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DE RUEHUL #0052/01 0140053
ZNR UUUUU ZZH
R 140053Z JAN 10
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 6687
RUEHKO/AMEMBASSY TOKYO 7203
RUEHBJ/AMEMBASSY BEIJING 7139
RUEHBK/AMEMBASSY BANGKOK 8238
RUEHGP/AMEMBASSY SINGAPORE 7642
RUEHHK/AMCONSUL HONG KONG 4062
RUEHSH/AMCONSUL SHENYANG 5508
RUEHVK/AMCONSUL VLADIVOSTOK 1793
RUEHIN/AIT TAIPEI 4431
RUCPDOC/USDOC WASHDC 9592
RUEHRC/DEPT OF AGRICULTURE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEAUSA/DEPT OF HHS WASHDC
RHEHAAA/WHITE HOUSE WASHDC
RUCPDC/NOAA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI
RHMFISS/COMUSKOREA SCJS SEOUL KOR
RHMFIUU/CHJUSMAGK SEOUL KOR

UNCLAS SECTION 01 OF 06 SEOUL 000052

SIPDIS

STATE FOR OES/IHB, OES/SAT, OES/PCI AND OES/EGC
STATE FOR EAP/K, ISN/NESS AND STAS
STATE PASS TO EPA FOR INTERNATIONAL PROGRAMS
WHITE HOUSE FOR OSTP AND CEQ
DOE FOR INTERNATIONAL, NE, FE, AND EERE
USDOC FOR 4400/MAC/EAP/OPB/ITA/TA
USDOC FOR NIST
HHS FOR OGHA
HHS PASS TO NIH FOR FIC
STATE PASS TO NSF FOR INTL PROGRAMS
STATE PASS TO NRC FOR INTL PROGRAMS

E.O. 12958: N/A
TAGS: ENRG EAGR ECON EIND PREL SENV TBIO TPHY KGHG KHIV
KS
SUBJECT: SEOUL ESTH UPDATE - DECEMBER 2009

IN THIS ISSUE

- South Korea Signs Nuclear Energy Deal with United Arab Emirates
- Graduate School for Nuclear Power Studies to Open in Korea
- Nuclear Energy Clauses Deleted from Draft Basic Law on Low-Carbon
and Green Growth
- South Korea to Launch Global Climate Change Institute
- Ministry of Knowledge Economy Says Carbon Reduction Plan Will Slow
GDP Growth
- Korean Scientists Make Breakthrough in Bio-Plastics Production
- LG to Begin Crystalline Silicon Solar Cell Production in January
- Korea to Build Nuclear Research Reactor in Jordan
- Domestic Scientists Develop New Strain of Rice
- Statistics Highlight Extent of Aging Population and Increased
Cases of Dementia
- H1N1 Influenza Alert Level is Lowered as Cases Decline
- HIV Positive Foreign Workers File Discrimination Petition
- Profile: Korea Institute of Energy Research

----------------------
Energy and Environment
----------------------

South Korea Signs Nuclear Energy Deal
with United Arab Emirates
-------------------------------------

1. President Lee witnessed the signing of a contract December 27
that will award USD 20 billion to a South Korean consortium led by
the Korea Electric Power Corporation (KEPCO) to supply four 1400
megawatt light water nuclear reactors and design and build four
nuclear power plants in the United Arab Emirates (UAE). The
consortium is expected to earn another USD 20 billion through joint
operation of the plants over the next 60 years. Work on the plants
is expected to begin in 2012 with the first plant completed by 2017
and the other three plants completed by 2020. The Emirates Nuclear
Energy Corporation chose Korea's bid over a competing bid by a
French consortium led by Areva SA and a joint U.S./Japanese proposal
by GE/Hitachi. A Ministry of Knowledge Economy representative told
the press that construction and operation of the four reactors and
plants is expected to create more than 100,000 Korean jobs over the
next several years.

2. The UAE deal is an important early success as Korea attempts to
capitalize on the global renaissance in nuclear power plant
construction. In February, Doosan Heavy Industries exported a 500
megawatt pressurized light water reactor to the China National
Nuclear Corp. In August, KEPCO and Nuclear Power of India Ltd.
signed an agreement to study the feasibility of licensing Korean
reactors and constructing Korean plants in India. Korea is
competing with France, Canada and Russia for construction of a 1000
megawatt nuclear power plant near the city of Aqaba. KEPCO is also
discussing the possible construction of two nuclear power plants in
Turkey and is planning to bid on a contract for a nuclear plant in
the Ukraine. Korea's success in winning the UAE bid could signify
the Korean nuclear industry's competitiveness in price, construction
experience, and safety.

Graduate School for Nuclear Power
Studies to Open in Korea
---------------------------------

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3. On December 29, Korea's Ministry of Knowledge Economy approved a
plan by KEPCO to establish the world's first international graduate
school for nuclear power studies. The International Nuclear
Graduate School (INGS), scheduled to open March 2012, will be
established next to the Kori Nuclear Power Plant Complex, about 60
km northeast of Busan, which will allow students easy access to
on-the-job-training and practical learning experiences. Courses
will include nuclear energy planning, design, operations,
management, and maintenance. The two-year graduate school will
accept 100 students in each graduating class - half of them will be
non-Korean students selected from countries that are potential
importers of Korean nuclear reactors and power plants. The UAE has
already stated it will send ten of its nuclear plant workers to the
school. Much of the 58 billion won (USD 48 million) funding for the
school will come from KEPCO and its four affiliates - Korea Hydro &
Nuclear Power (KHNP), Korea Power Engineering Company, Korea Plant
Services & Engineering, and Korea Nuclear Fuel.

4. The school is one element of Korea's systematic and long-term
effort to become a leading exporter of nuclear energy reactors and
of construction for nuclear power plants. Yun Jung-hyun, team
leader of the KEPCO-INGS task force, told the Korea Herald on
December 30, "Raising talents from potential export countries such
as Turkey, Jordan, Vietnam and Indonesia will produce valuable
networks we need in the future."

Nuclear Energy Clauses Deleted from Draft Bill of
Korea's Basic Law on Low-Carbon and Green Growth
--------------------------------------------- ----

5. On December 7, the National Assembly's Climate Change Special
Committee approved the "Basic Law on Low-Carbon Green Growth," after
deleting clauses that would set in law plans to expand the number of
Korea's nuclear power plants from the current 20 to 37 by 2030. The
bill now can be presented to the National Assembly's plenary session
for final voting and approval. In deleting the provisions
pertaining to nuclear energy, legislators reportedly acted in
cognizance of environmental and safety concerns by civic groups.
Notwithstanding the lawmakers' actions, the Lee Myung-bak
Administration still plans to carry out its nuclear energy expansion
program; however, those plans will now lack the force of law.
Members of the domestic nuclear energy community worry that without
enacting legislation, it will now be more difficult to secure future
nuclear power plant sites.

6. The Lee administration submitted the draft legislation to the
National Assembly in late February. Key points of the bill were the
expansion of the nuclear energy industry through construction of
additional reactors and power plants, the introduction of a
market-based cap-and-trade system on domestic carbon emissions,
increased R&D into renewable energy technologies, and a series of
eco-friendly infrastructure projects (the Green New Deal) designed
to create nearly one million jobs.

South Korea to Launch Global Climate Change Institute
--------------------------------------------- --------

7. In his December 16 keynote address at the Copenhagen climate
conference, President Lee Myung-bak announced plans to launch an
international institute early next year to spearhead global efforts

SEOUL 00000052 003 OF 006


to fight climate change and also help provide developing countries
with mitigation plans and necessary technology. The institute,
tentatively named the Global Green Growth Institute (GGGI), "can act
as a global think tank and bridge between advanced and developing
countries," the South Korean leader said. The Office of the
President announced on December 17 that the institute will be
established in South Korea in the first half of next year and at
least five branch offices will be opened in advanced and developing
countries before the end of 2012 jointly funded by the host
countries. The institute will bring together the world's top
scientists and climate experts to come up with what Lee called
"workable solutions" to environmental problems.

Ministry of Knowledge Economy Says Carbon
Emissions Reduction Plan Will Slow GDP Growth
---------------------------------------------

8. South Korea's 2020 reduction target of carbon emissions by four
percent below 2005 levels would cause the country's per-capita GDP
to fall if implemented, a government report said on December 10.
The joint report by the Ministry of Knowledge Economy (MKE), Seoul
National University and the Korea Productivity Center forecast the
national economy could grow an average 3.65 percent annually from
2005 through 2020. The report noted, however, that if the country
moves to mitigate greenhouse gas emissions in accordance with the
plan outlined by the Presidential Committee on Green Growth, the GDP
growth would be reduced 0.4 percentage points to 3.25 percent in the
cited period.

--------------------
Science & Technology
--------------------

Korean Scientists Make Breakthrough
in Bio-Plastics Production
-----------------------------------

9. A team of Korean scientists from LG Chem and the Korea Advanced
Institute of Science and Technology (KAIST) have developed a more
efficient and cost-effective method to produce bio-plastics. The
research focused on Polylactic Acid, a bio-based alternative to
petroleum-based plastics such as the polyethylene and polystyrene
used in every-day household items and fabrics such as grocery bags,
styrofoam cups, and polyester clothing. Polylactic Acid is
bio-degradable and lower in toxicity that fossil-fuel based
plastics. Bio-plastics currently comprise only about 0.2 percent of
global plastics use because the cost of production has been more
expensive than producing plastics from fossil-fuel based chemicals.
Until now, Polylactic Acid has been produced in a two-step
fermentation and chemical process. The Korean team used a
genetically engineered strain of the common bacterium E. coli to
develop an efficient one-step production process. The new process
is 40 percent less costly than the two-step process, which could
make bio-plastics cost competitive with petroleum-based plastics at
about USD 50 per barrel of oil.

LG to Begin Crystalline Silicon
Solar Cell Production in January
--------------------------------

10. LG Electronics announced December 22 that it will start

SEOUL 00000052 004 OF 006


manufacturing crystalline silicon solar cells in January. The
company has invested 220 billion won (USD 187 million) to complete
two solar cell production lines, each capable of producing more than
half a million 1.0 by 1.6 meter solar panels containing cells with
120 megawatt capacities - enough solar cells to produce electricity
for approximately 40,000 families for one year. While thin-film
cells are becoming more popular due to their flexibility,
crystalline cells continue to be more efficient in light-to-energy
conversion. LG expects crystalline silicon solar cells to comprise
about 80 percent of the global solar cell market in coming years.

Korea to Build Nuclear Research Reactor in Jordan
--------------------------------------------- ----

11. A Korean partnership consisting of the state-run Korea Atomic
Energy Research Institute (KAERI) and Daewoo Engineering and
Construction has been selected after an international bidding round
as the preferred group to build a 5-megawatt research reactor inside
the Jordan University for Science and Technology by 2014, the
Ministry of Education, Science and Technology said on December 4.
KAERI has been operating its 30-megawatt research reactor "HANARO,"
or High-flux Advanced Neutron Application Reactor, since 1995 and
has been seeking export markets in the past several years. He
announcement took place just three weeks before Korea signed a deal
with the United Arab Emirates to construct and operate four
full-scale 1400 megawatt light water nuclear power plants in the
UAE.

Domestic Scientists Develop New Species of Rice
--------------------------------------------- --

12. Yonhap news reported on December 9 that a team led by Ryu
So-noh, an agricultural science professor at Korea National Open
University has developed a new strain of rice that has a high
concentration of cyaniding 3-glucoside (C3G), which is gaining
recognition as a beneficial food supplement. The chemical has been
shown to reduce atopic skin symptoms and help prevent diabetes. The
grain also has 1.2 times normal rice's levels of anthocyanin, a
flavonoid pigment with powerful anti-oxidant qualities. The
research began in 2006 in cooperation with the state-run Rural
Development Administration.

------
Health
------

Statistics Highlight Scale of Aging Population and
Increased Cases of Dementia
--------------------------------------------- -----

13. According the latest Korea Statistics Almanac recently
published by Statistics Korea (formerly the National Statistical
Office), children under 14 made up more than 40 percent of the
Korean population in 1955, but that number has declined to 16.8
percent as of the year 2009, an indication of the nation's low
birthrate. In 1955, people aged over 65 accounted for only 3.3
percent of the total population, but now senior citizens constitute
10.7 percent of the population, highlighting the scale of Korea's
aging population. In a separate report, the Korea Institute for
Health and Social Affairs (KIHSA) said that over 45,000 Koreans were
afflicted with dementia in 2009, and the number is expected to

SEOUL 00000052 005 OF 006


increase to 47,000 in 2010. With continued rapid aging of Korea's
population, KIHSA predicts that the number of dementia patients will
surpass one million people by 2030. Besides the personal emotional
and health impacts of dementia, KIHSA says the economic costs of
dementia to society will soar. Medical spending on dementia
patients jumped six-fold in the past 5 years to 303 billion won (USD
264 million), and that figure will rise along with the total number
of dementia cases.

H1N1 Influenza Alert Level Is Lowered as Cases Decline
--------------------------------------------- ---------

14. On December 10, the Korea Centers of Disease Control and
Prevention (KCDC) lowered its H1N1 flu alert from "red" to "orange"
as the pace of H1N1 infections has slowed in recent weeks. The
country had maintained a "red" alert status since early November,
but the infection rate and number of fatalities from the epidemic
have been waning since peaking at the beginning of November. KCDC
said that the ad hoc Central Disaster Relief and Safety Control
Headquarters has also been disbanded and its emergency mission has
been turned over to KCDC effective December 11. The latest KCDC
data show that H1N1-related deaths in South Korea amounted 148 as of
December 12. Of the 148 fatalities, 132 were classified as high
risks patients (elderly or with pre-existing medical conditions).
The influenza-like illness (ILI) index per 1,000 out-patients has
dropped to 18.5 during the second week of December, down 59 percent
from its peak during the first week of November and down 17.5
percent from the first week in December.

HIV Positive Foreign Workers File Petition
for Discriminatory Measures
------------------------------------------

15. According to a local news report of December 2, a coalition of
human rights groups and a foreign workers' association (the
Migrants' Trade Union) in Korea filed a petition with the National
Human Rights Commission, coinciding with World AIDS Day of December
1. The petition claims South Korea infringes on the human rights of
foreign migrants by conducting tests for HIV on them during routine
health checks without their knowledge or consent. According to
South Korea's AIDS prevention law, a person's consent is required
before testing for HIV. The petition also says current immigration
controls discriminate against foreigners with AIDS. "Foreigners who
have received work permits are deported from the country if they
test positive for HIV," the petition stated, noting that over 600
foreign workers have been forced to leave Korea since the late
1980s. UN Secretary General Ban Ki-moon earlier called on South
Korea's health minister to remove the country's immigration controls
on foreigners with HIV, pointing out that it is one of only eleven
countries in the world to impose such restrictions.

-------
Profile
-------

Korea Institute of Energy Research
----------------------------------

16. The Korea Institute of Energy Research (KIER), located in
Daejeon, central Korea, was founded in 1977 by the government and is
chartered to perform basic and applied research in various energy

SEOUL 00000052 006 OF 006


technologies focusing on the nation's policy goals of "low carbon
and green growth." Its R&D areas range from renewable energy
technologies including solar, wind power, fuel cells, and hydrogen
energy to carbon capture and storage technology, clean use of fossil
fuels, energy efficiency for industry, transportation and buildings,
and energy materials development. In addition, KIER advises the
government on energy-related policies, such as how to meet the
challenges of climate change and how to cope with the versatility of
oil prices.

17. Currently KIER has 355 full-time employees, of which 18
researchers hold M.S. or Ph.D. degrees from a U.S. university. KIER
has maintained a close relationship with the National Energy
Technology Laboratory of the U.S. Department of Energy since both
agencies signed an MOU on collaboration in 2007. KIER also has a
working relationship with Georgia Institute of Technology and the
U.S. National Renewable Energy Laboratory.

TOKOLA

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