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China picks Westinghouse for 4 nuclear plants
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In a major coup for Westinghouse Electric Co., China has selected it to build four nuclear power plants, the first of more than two dozen the world's most populous country hopes to build over the next 15 years.
A tentative agreement on the multibillion-dollar contract, which had been more than a decade in the making, was signed yesterday in Beijing by Chinese officials, U.S. Energy Secretary Samuel Bodman, a representative from Westinghouse's Louisiana-based partner Shaw Group and Westinghouse President Steve Tritch.
The deal is expected to generate some 5,000 jobs in the United States, many in this region, where Monroeville-based Westinghouse already employs about 3,000 and plans to add up to 2,000 more -- in part on expectations of the China nuclear plant deals -- through an expansion of research facilities either in Monroeville or Cranberry.
The company expects to use suppliers in 20 states, including several in this region through ties that date back more than a generation, when Westinghouse was a huge industrial conglomerate. The company built the nation's first nuclear plant, in Shippingport in 1957.
"This is certainly positive for Westinghouse and for Western Pennsylvania,'' spokesman Vaughn Gilbert said.
He said Mr. Tritch had been in China since Dec. 6 to hash out last-minute details on the tentative agreement.
The agreement ends more than two years of intense negotiations that saw top government officials from the United States and France get involved as China narrowed its choice to Westinghouse and France's state-owned Areva Group.
China wants to double to 4 percent its power from nuclear energy by 2020 to cut pollution from coal-powered plants and ease its dependence on oil imports, a goal that would require it to build 25 nuclear plants. That represents a huge chunk of new business for a company that has seen new plant orders virtually disappear until recently, when it was selected to build a dozen new domestic nuclear plants if regulators give the go-ahead.
The China contract would mark the first international orders for Westinghouse's latest technology, the AP1000, a safer, quicker-to-build pressurized water reactor that can generate about 1,100 megawatts of electricity -- about the same as existing nuclear plants -- with 35 percent fewer pumps, 50 percent fewer valves, 70 percent less wiring and 80 percent less piping.
Westinghouse developed the technology in the 1990s and has been pushing to get a foot in the door in China ever since. China initially expressed interest in the new generation of nuclear plants in 1997, when President Clinton lifted a ban on the sale of nuclear technology to the country.
Westinghouse hopes the four reactors -- two each in Sanmen in Zhejiang province and at Yangjiang in Guangdong province -- would be up and running by 2013, Mr. Tritch said.
While a formal dollar figure was not put on the order, observers have said the AP1000s typically would be ordered in twos at a cost $2.2 billion to $2.7 billion a pair. That would value the China contract at $4.4 billion to $5.4 billion.
"This is an exciting day for the U.S. nuclear industry," Mr. Bodman said at yesterday's ceremony, where he and China's minister for the National Development and Reform Commission, Ma Kai, signed a memorandum of understanding supporting the transfer of nuclear technology to China.
That cleared the way for the subsequent signing of a companion agreement between China, Westinghouse and the Shaw Group, which owns a minority stake in Westinghouse along with Japan's Ishikawajima-Harima Heavy Industries Co. Japanese electronics giant Toshiba Corp. owns the controlling 77 percent stake in Westinghouse, which it purchased in October from British Nuclear Fuels PLC for $5.4 billion.
Yesterday's agreement, struck in the wee morning hours, capped several days of top-level trade talks between China and the United States that otherwise yielded few concrete results. It was signed on the sidelines of a closed-door meeting of five major oil importing nations hosted by China
The Chinese side said it chose Westinghouse over Areva based on Westinghouse's technology, its agreement on transferring expertise, the style of cooperation and the prospects for developing locally based technology.
The agreement "pushes mankind into a new level of nuclear technology development," said Mr. Ma. "This project will certainly play a very important role in enhancing the cooperative partnership between China and the U.S."
"There is going to be some benefit on both sides," Mr. Tritch said. "As we take this technology forward in China we believe it will also help accelerate the efforts for the United States market as well."
First Published December 17, 2006 12:00 am
