China showing interest in $20 billion nuclear energy deal with Westinghouse
Source: www.chinamining.org Citation:powersource.post-gazette.com Date: July 30, 2014
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| A containment building under construction at Sanmen on China’s eastern coast, the site of Westinghouse`s first AP1000 reactor. It is now expected to be online by the end of next year. |
Westinghouse Electric Co. may be close to a $20 billion deal with China, according to its president and CEO Danny Roderick.
Following a meeting July 21 with Chinese government nuclear leaders, Mr. Roderick walked away "with a really clear message" - China wants to commission 26 more plants using Westinghouse technology.
The company estimates that each new AP1000 reactor comes with 20,000 direct and indirect jobs, many in the Pittsburgh region, which the Cranberry-based nuclear company calls home.
Discussions about the new plants were still preliminary, cautioned Westinghouse spokeswoman Sheila Holt, but Mr. Roderick said China would be ready to pull the trigger "as soon as we can show the final plan for how to finish Sanmen."
Westinghouse is building two of its first four AP1000 reactors in Sanmen, on China`s eastern coast. The units originally were scheduled to go online in late 2013 but have been delayed twice, partly because of post-Fukushima safety inspections and partly for technical reasons. The Fukushima Daiichi nuclear accident that followed a devastating earthquake and tsunami in Japan in March 2011 put on pause many nuclear ventures, forcing governments and companies to re-examine their safety protocols.
Westinghouse wouldn`t comment on the specifics of the delays but noted these were "first of a kind" reactors, the lessons of which would be applied to all current and future AP1000 projects around the world.
A two-year delay is more the norm than not in the nuclear industry, where construction times can take up to a decade.
"Fukushima has disrupted a lot of schedules," said Bob Percopo, an energy finance consultant who advises nuclear companies on risk.
"Every time there`s a hiccup on a nuclear project around the world, you`re going to wind up with time delays," he said. "It`s a natural reaction. But the one thing about the Chinese is when they decide they`re going to move from point A to point B, they`re going to get there."
Mr. Roderick said Westinghouse will be able to finish Sanmen Unit 1 by the end of 2015. That`s what he shared with a group of nearly 20 Chinese dignitaries that visited Westinghouse July 21, including the chief administrator for China`s National Energy Administration and the chairman of the State Nuclear Power Technology Corp., which is building the Westinghouse plants.
"We`re at the cusp of having a big wave of units authorized," Mr. Roderick said. "What they wanted to share with us is they really want to accelerate these programs. The premier wants to accelerate nuclear to reduce coal."
The 26 new plants, which would be slated for inland sites, would be in addition to eight coastal plants currently being negotiated between Westinghouse and China.
In May, experts cast doubt on those negotiations after a group of Chinese government officials were charged by the U.S. government with hacking into Westinghouse computers, stealing product specifications and intercepting correspondence between senior executives about how to negotiate with China.
Westinghouse was one of six companies targeted by the hackers, but the only one that had agreed to transfer its technology to its Chinese business partners.
Mr. Roderick said the allegations haven`t soured Westinghouse`s relationship with its single biggest customer.
"We`ve had a lot of very serious discussions with them about intellectual property," Mr. Roderick said. "This is new for China." The traditional attitude toward intellectual property in the country has been that "if someone has it, everyone should have it."
Westinghouse was notified of the charges the night before the FBI publicly announced them to the world, he said.
"China did exactly what we thought they would," Mr. Roderick said. That is, the country`s officials denied the charges then launched an internal investigation.
"We got a lot of confirmation from the companies we work with that it wasn`t them," Mr. Roderick said. "I don`t know that it has distracted our business."
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