GE Lobbies China to Get Into Nation's Nuclear Market (Update1)
April 18 (Bloomberg) -- Andrew White, head of General Electric Co.'s nuclear unit, is lobbying China to accept a design used in a fifth of the world's reactors to catch up with Areva SA in the world's fastest-growing market.
China's insistence on so-called pressurized-water reactors that run half the world's nuclear plants is preventing GE from offering its boiling-water technology, White said in an interview in Beijing.
GE is counting on China to revive reactor sales after the Fairfield, Connecticut-based company completes its only existing project to install two units in Taiwan. China may account for half the 70 gigawatts of new nuclear power capacity built around the world over the next 15 years, White said.
``There's not much we can do until we're allowed to bid,'' White said. ``We'll be lucky to get into the next round of bidding.''
China's plan to increase its nuclear-power capacity to 36,000 megawatts by 2020 will require an estimated 27 new 1,000- megawatt reactors costing about $2 billion each, according to a September estimate by Yu Jianfeng, a director at China National Nuclear Corp.
GE and Monroeville, Pennsylvania-based Westinghouse Electric Co. were prevented until 2004 from selling reactors in China as Paris-based Areva, the world's largest builder of nuclear reactors, and Russia's AtomStroyExport won contracts.
`Playing Catch-Up'
``We're playing catch up,'' White said. ``We're in the position where we are because we were late into the game.''
The U.S. had restricted exports of advanced technology to China since the 1989 crackdown on pro-democracy demonstrations, when the Chinese army fired on student protesters.
China needs to add two reactors a year to meet a target of generating 4 percent of its power from nuclear plants by 2020, in contrast with the U.S. and Europe, where environmental and safety concerns have halted reactor construction.
China didn't invite GE to bid for an $8 billion contract that closed on Feb. 28 to build four reactors, White said. Areva, AtomStroyExport and Westinghouse Electric Co., the U.S. unit of state-owned British Nuclear Fuels Plc and Areva are vying for the business.
China's insistence on the transfer of nuclear technology and a share of ownership of nuclear plants also delayed GE's entry into the market, White said.
Single Technology
``They want to standardize on one single technology and they want to feel comfortable they can execute the technology transfer,'' White said. ``For the first number of reactors, they decided on a similar model to what Korea uses, where they decided to standardize.''
GE is intensifying efforts to educate the Chinese government, utilities and universities about its boiling-water technology and raising awareness that the company is ``in the nuclear industry,'' White said.
China's four nuclear power plants, which account for 1.7 percent of the country's electricity needs, use pressurized-water technology from France, Russia and Canada.
China is leading a revival in nuclear power among developing countries including India as developed nations such as the U.S. and Germany halted their nuclear programs because of concerns about safety and environmental risks, highlighted by the 1986 Chernobyl reactor accident in the Ukraine.
Chernobyl
Only one reactor order has been placed outside Asia since Chernobyl, by Finland in 2003, according to the World Nuclear Association. Finland paid $3.7 billion for a model from Areva's Framatome ANP nuclear-reactor unit, a venture with Germany's Siemens AG.
GE, which has in the past been ``more conservative and reserved'' about nuclear energy, is pushing harder for sales as engineers develop a ``next generation'' of reactors and build a proven safety record, White said.
``Now, we've been openly talking about nuclear as being part of our balanced portfolio of energy solutions,'' White said. ``I think our CEO and our boards of directors are much more supportive today than maybe they were several years ago.''
Jeffrey Immelt became chief executive officer of the world's second-biggest company by market value in 2001.
Global Nuclear Demand
No nuclear plants have been ordered in the U.S. since 1978, according to the Vienna-based International Atomic Energy Agency. Germany agreed in 2000 to permanently close its 19 nuclear power plants over the next two decades, after Chancellor Gerhard Schroeder met an election pledge to phase out nuclear power.
Sixty four new nuclear units may be built around the world between now and 2020, according to GE's estimates. Countries in Asia may build 42 reactors, Europe 10 and North America 12, the company said.
Even so, it may be some time before concern about rising energy prices helps prompt an increase in the pace of nuclear power-plant orders, Frederic Lasserre, head of commodities research at Societe Generale SA, said today in Beijing.
``We don't see any major investment into nuclear plants, Lasserre told reporters during a briefing. ``What we see is that the debate has been reopened, which is the first step. In some countries, it was almost impossible to discuss building new nuclear power plants.
``Rising oil prices are making people think about using alternative fuels, but not taking action as yet.'' |
