Westinghouse Races China for $1 Trillion Nuclear Power PrizeBy , , and
CEO expects China to order 30 of its AP1000 atomic reactors
China approves construction of 6 domestically designed units
A nuclear windfall is up for grabs.
China plans to almost triple its atomic power generation by the end of the decade and is forecast to spend $1 trillion to expand capacity by 2050. Westinghouse Electric Co. says its latest model will trump a mainland rival, the Hualong One, designed by the country’s largest nuclear operators.
The Pennsylvania-based company, which will fire up its first AP1000 reactor in China in 2016 after years of delays, is seeking a foothold in the world’s largest energy consumer just as President Xi Jinping tries to nurture homegrown technology while shifting away from more polluting fossil fuels. Westinghouse is promoting the new unit as the safest and most efficient available.
“The AP1000 is going to be able to compete against anybody or anything,” Chief Executive Officer Daniel Roderick said in an interview in Tokyo. “The next wave of AP1000s will be built between 36 and 40 months. If that’s the case, then we will be competitive against Hualong.”
Westinghouse’s first AP1000 reactor is scheduled to start by the end of next year in Zhejiang Province on China’s east coast. It was originally scheduled to come on stream in 2013. China has committed to boosting nuclear power, which accounted for about 1.5 percent of its total installed electricity last year, to help reduce reliance on coal-fired plants and cut pollution.
Beijing’s first red alert warning for air pollution is set to be lifted Thursday with forecasts for the smog that has shrouded the Chinese capital and surrounding areas to subside. The alert forced the closing of schools and some factories, and was imposed on Dec. 8 for the first time since introduction of an emergency air-pollution response system in 2013.
China will decide to build 30 Westinghouse-designed AP1000s over the next 10 years, according to Roderick, who expects the company’s profit to double over the same period. The country will require roughly $1 trillion to expand its atomic capacity to as much as 250 gigawatts by 2050, which would account for about a quarter of global nuclear power, according to the International Energy Agency.
China has approved construction of six Hualong Ones within the country, according to China General Nuclear Power Group, which helped design the new unit. China’s National Energy Administration, which makes final approval for reactor designs, didn’t respond to a fax seeking comment.
“Hualong One is China’s third-generation nuclear model with a full set of intellectual property rights,” CGN said in an e-mailed statement. “The technology meets the world’s highest safety and technical standards. CGN is actively expanding in international markets following business rules and related nuclear power regulations.”
China in 2006 picked Westinghouse, a unit of Japan’s Toshiba Corp., to build four reactors. Completion was delayed due to design problems, supply chain bottlenecks and stricter safety measures after the 2011 Fukushima disaster in Japan. Westinghouse may face challenges grabbing a bigger share of the country’s growing demand, according to Lin Boqiang, director at the China Center for Energy Economics Research at Xiamen University.
“The only way Westinghouse can win contracts in China is to demonstrate they can build reactors quicker and cheaper than anyone else in China’s market and win hearts with actions, not words,” said Lin. “Westinghouse so far hasn’t demonstrated such abilities.”
The state-owned companies behind the Hualong One reactor want to boost construction at home and export the technology, according to Shi Yan, a Shanghai-based analyst at UOB-Kay Hian Ltd. The Chinese plant is about 30 percent cheaper to construct than the average U.S. nuclear unit, according to Steve Wong, an analyst at China Galaxy Intl Financial Holdings. Construction of the first Hualong One began in May in China’s Fujian province.
In October, President Xi announced a 6 billion pound ($9 billion) investment in the U.K.’s first nuclear power project in a generation. The plan, led by Electricite de France SA and China General Nuclear Power Corp., involves three new nuclear power plants being built in the U.K., including a unit in southern England that may incorporate a Chinese-designed reactor.
The country plans to export by 2020 as many as eight domestically designed nuclear reactors, including the Hualong One, China Daily reported in June.
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