New legislation and market interest signal a shift in nuclear energy investment
Category: Business
In a notable shift for South Korea's nuclear energy sector, the government has implemented a special law aimed at promoting the Small Modular Reactor (SMR) industry, sparking renewed interest among investors. As of September 11, 2026, the law, titled the "Special Act on the Promotion and Support of Small Modular Reactor Development," is set to support the entire lifecycle of SMR technology from research and development to commercialization.
The law's implementation comes as part of the government's ambitious plan to commercialize pressurized SMRs by 2035, with construction of non-pressurized SMRs expected to begin in the 2030s. This strategic move is seen as a response to the global shift toward cleaner energy sources and a recognition of the potential role of nuclear power in achieving energy security.
With the new legislation in place, the South Korean government is providing systematic support for SMR R&D and establishing a framework for private sector participation. Starting next year, a public-private partnership will kick off detailed SMR design work, incorporating advanced technologies like digital twins for verification and testing.
This commitment is underscored by the government's plans to designate specific areas as SMR development zones, which will facilitate research and technological transfers. The government aims to create a supportive ecosystem that encourages innovation and investment in SMR technology.
Among the companies positioned to benefit from this legislative change is Doosan Enerbility, which has identified SMRs as a core growth area. In August 2026, the company signed a contract with TerraPower, a U.S.-based developer, to manufacture key SMR components, including reactor pressure vessels and supporting structures. Earlier in May, Doosan was selected as a key equipment partner for Rolls-Royce's SMR projects in the UK and Czech Republic.
On the stock market, Doosan Enerbility's shares closed at 90,800 KRW on September 11, marking a 1% increase from the previous trading day. The company has become a focal point as it transitions from the R&D phase to detailed design and potential construction of SMRs.
Another key player, Korea Electric Power Technology (KEPCO), is also actively involved in the SMR sector. KEPCO is working on the design and regulatory review of innovative SMR systems, including the i-SMR. On the same day, its stock price rose by 4.83%, closing at 152,000 KRW.
Meanwhile, Woori Technology is entering the SMR market through contracts for non-safety-related Distributed Control Systems (DCS), aiming to supply DCS for SMR projects starting in 2024. The company's stock price saw substantial fluctuations, peaking at 14,320 KRW on September 9 before closing at 14,050 KRW on September 11.
The broader market response reflects heightened interest in the SMR sector. The SOL Korea Nuclear SMR ETF, which includes various domestic nuclear-related stocks, closed at 17,525 KRW on September 11, up by 1.89%. This follows a trend of increasing stock prices among companies involved in the nuclear energy sector, with several ETFs focused on nuclear themes showing impressive returns.
For example, the "TIGER Korea Nuclear" ETF recorded a remarkable 17.42% return over the past week, making it the top-performing ETF in South Korea. This ETF invests across the entire nuclear value chain, including development, operation, design, construction, fuel supply, and maintenance.
The composition of the ETF reveals a strong concentration in key players, with Hyundai Construction holding a 25.35% stake and Doosan Enerbility at 23.47%, together accounting for nearly half of the fund's total investment. Such performance highlights the growing confidence in the nuclear sector, particularly as the government solidifies its commitment to SMR technology.
Even with this optimistic outlook, challenges remain. The immediate impact of the new law on securing contracts and actual project launches will be closely monitored. Investors are advised to differentiate between the various companies involved in the SMR space, as their paths and opportunities may vary significantly.
As the South Korean government pushes forward with its long-term goal of commercializing SMRs by 2035, the transition from research and development to construction and operational phases will be a key indicator of success. Observers will be looking to see how quickly and effectively these companies can translate government support into tangible projects.
In essence, the SMR initiative signifies a turning point for South Korea's energy strategy, emphasizing a shift toward sustainable and secure energy sources. The upcoming months will reveal whether this legislative support translates into successful projects and whether the market can sustain its current interest in nuclear energy.
As the industry evolves, investors and stakeholders alike will need to remain vigilant, watching for project announcements and contract signings that could shape the future of nuclear energy in South Korea.