SK Innovation announced on the 21st that it has transferred a portion of its stake in TerraPower, a U.S. next-generation small modular reactor (SMR) developer, to Korea Hydro & Nuclear Power (hereinafter KHNP).

SK Innovation has completed the transfer of part of its TerraPower stake to KHNP. By strengthening cooperation among the three companies, they plan to target the global SMR market. This marks the first time a Korean state-owned energy company has directly invested in a global SMR developer.

TerraPower is a next-generation nuclear power developer founded in 2008 by Microsoft (MS) co-founder Bill Gates. Based on its Natrium reactor technology, which combines a gigawatt-scale energy storage system, TerraPower is building the world’s first commercial SMR plant in the U.S. state of Wyoming. The project is being pursued with a target completion date of 2030.

SMRs are assessed as next-generation power sources that can reduce construction time and costs through modular designs and allow for phased capacity expansion, enabling flexible responses to surging power demand. In particular, TerraPower’s Natrium SMR has strengths in linkage with renewable energy, as it can perform load-following operations using energy storage systems.

SK Innovation is participating in the technology development area of TerraPower’s Wyoming SMR project, and KHNP’s participation is seen as enabling the combination of Korean nuclear power technology with next-generation SMR technology. In December last year, KHNP completed the review by the Committee on Foreign Investment in the United States (CFIUS) regarding its acquisition of a TerraPower stake, thereby securing an institutional foundation for entering the global SMR market.

SK Innovation and SK Inc. invested in TerraPower in August 2022 and hold positions as the second-largest shareholders. This status will be maintained even after the partial stake transfer. SK Innovation, KHNP, and TerraPower signed a memorandum of understanding in April 2023 for SMR development and demonstration.

Meanwhile, according to recent foreign media reports, global big tech company Meta has also reportedly expressed its intention to participate in TerraPower’s next-generation SMR project. Industry observers expect that if Meta and other global demand-side players begin full-scale participation, cooperation among the three companies is highly likely to lead to an expansion of global SMR business.

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