Westinghouse Expects Additional AP1000 Nuclear Reactor Orders From China

Westinghouse Electric Co., owned by Toshiba Corp., expects additional orders for its third- generation AP1000 reactors from China after selling four units three years ago to the world’s fastest-growing nuclear market.

“There are going to be more AP1000s and the success of the current ones will determine that,” Jack Allen, Westinghouse’s president for Asia, said in an interview in Beijing today, adding talks haven’t formally begun. “There are no guarantees. Westinghouse is working very hard with customers here.”

China and India are leading the biggest atomic expansion since the decade after the 1970s oil crisis to cut pollution and power economies. Under a 2007 accord, Westinghouse is jointly building four AP1000 reactors with companies led by China National Nuclear Corp., and has transferred nuclear technology as it seeks to forge a lasting partnership with future rivals.

“It seems entirely reasonable to me to say that the company will get a lot more out of China,” said Rajesh Panjwani, an analyst at CLSA Asia-Pacific Markets in Hong Kong. “Westinghouse has been selling nuclear technology in Korea for almost 20 years and it still needs Westinghouse’s assistance.”

China’s 11 existing nuclear power generating units all use second-generation technology, the official Xinhua News Agency said on July 22. The nation plans at least 60 new reactors by 2020, Xu Yuming, executive director of the China Nuclear Energy Association, said on July 6.

‘Complex Technology’

The AP1000 offers “unequaled safety” and is the most economical reactor in the world, according to Westinghouse’s website. China started operating its first commercial nuclear plant in 1994.

“About half of the reactors planned in China are based on the AP1000 and this is very complex technology to master,” according to Panjwani. “This is a case of Westinghouse deciding to get involved in the biggest nuclear power market in the world and also assuming that it will take China some considerable time to fully master this technology.”

Westinghouse has handed over more than 75,000 technical documents to its Chinese customers, mainly government-run State Nuclear Power Technology Corp., under a technology transfer accord with China, Allen said.

China is also in talks with Westinghouse’s rival, Areva SA, on two third-generation European pressurized water reactors, or EPRs. Discussions are almost complete, Chief Executive Officer Anne Lauvergeon said yesterday.

Chinese Brand

“While I respect that China will be a very strong competitor, I believe they will also be a strong partner for us,” Allen of Westinghouse said. “We worked with France, in my early career, we worked with the Italians, we worked with the Spanish, we worked with Koreans, we worked with the Japanese, to transfer technology, and all are strong competitors. Still we continue to play a role in development of” nuclear technology.

China National Nuclear, the country’s biggest atomic plant builder, is seeking to construct a nuclear plant in Argentina, President Sun Qin said in July. The state-controlled company, known as CNNC, said in March it has constructed two reactors in Pakistan and signed in February an agreement to finance two additional units.

“CNNC has done a tremendous amount of reactor development and design, and without Westinghouse,” Allen said. Pan Jianming, spokesman at Beijing-based CNNC, couldn’t be reached for comment by telephone at his office.

China Guangdong Nuclear Power Group, the nation’s second- largest builder, said in April it will explore opportunities to reactors overseas with Electricite de France SA and Areva.

In November 2007, Areva agreed to sell two third-generation European pressurized water reactors, or EPRs, to China Guangdong Nuclear. Chinese nuclear builders’ grasp of the technology is “very worrying” for European companies, Lauvergeon told the French Senate yesterday. She also said Chinese companies are more efficient.

--Wang Ying in Beijing. With assistance from John Duce in Hong Kong and Tsuyoshi Inajima in Tokyo. Editors: Ryan Woo, Amit Prakash.

To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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