Asia's upcoming nuclear power plants spark fierce competition among global equipment makers

Asia's upcoming nuclear power plants spark fierce competition among global equipment makers

Business Standard (India)

12th April 2004

Asian nuclear market up for grabs

From India to China, energy- deficient Asia is spending billions of dollars to build nuclear power plants, sparking fierce competition among global equipment makers for the bonanza.

The blossoming of nuclear power in Asia, where 18 of the world's 31 units under construction are located, is dubbed by some as a renaissance of the sector and has become a massive magnet for European, Canadian and Russian suppliers.

The lure is so strong that the United States may relax this year its curbs on the sensitive technology transfers to select Asian nations as China has other sources of nuclear expertise.

"Nuclear power will certainly continue to increase as a share of the region' s capacity and that's mainly driven by activities in China and India," said Charles Chang, Asia power and gas analyst at rating agency Fitch.

Nuclear fuel makes up 1.4- 3.7 percent of the power output in Asia's two most populous nations, below the 35-40 percent for Japan and South Korea and 78 percent for France.

Few projects have broken ground in the West in the past few years as environmental and health and security concerns have persisted since the Chernobyl accident in 1986. A growing number of aging nuclear plants in Europe are reaching expiry their dates and it has not been decided if they would be replaced.

To clinch the lucrative contracts in Asia, nuclear equipment suppliers have focused on their safety records as well as competitive investment and production costs, analysts said.

Suppliers also have to convince their own governments to let them export such sensitive technologies. The governments must also build good ties to win such deals, industry experts said.

The suppliers include Framatome ANP, a venture between France's Areva and Germany's Siemens, Electricite de France, and Atomic Energy of Canada Ltd, an unlisted global nuclear equipment maker, and Russia.

Framatome said on its Web site it "is ready to take part in the new development phase of the Chinese nuclear programme" and "is ready to issue the most suitable proposal to allow the Chinese Industry to become more and more self sufficient."

Washington bars firms such as Pittsburgh- based Westinghouse Electric Co, a unit of state-owned British Nuclear Fuels Ltd, and General Electric, from building reactors in China.

But industry sources said Washington was expected to ease its control on China in September.

"US firms are not allowed to provide a whole set of equipments to China, let alone signing contracts and providing loans to build the plants for us. But this September the restrictions is expected to be lifted," said Liu Changxin, deputy secretary general with Chinese nuclear Society in Beijing.

China is about to build four 1000- megawatt (one million kilowatt) plants costing $ 6 billion as part of its drive to quadruple nuclear capacity to 32,000MW between 2005 and 2020.

Beijing plans to tender the projects in 2005, said the World Nuclear Association (WNA)

Westinghouse would bid to supply its latest reactors, known as AP 1000, scheduled to get design approval in September, will be $1000-$ 1200 per kilowatt.

Framatome would also make a bid, said the WNA, which represents nuclear companies and organisations.

Gilbert Vaughn, a Westinghouse spokesman, said the use of " a series of AP 1000s in China" could support as many as 5000 skilled jobs over the course of construction.

" These jobs would help to load Westinghouse design-and-manufacturing facilities as well as those of US-based suppliers, including major architectural, design and construction organisations," Vaughn said in an email to Reuters.