25 July 2007 – Westinghouse Electric has won the right to build four nuclear power plants in China and to transfer technology for its newest reactor to a Chinese partner, a cost of gaining a foothold in the country’s fast-growing industry.
Westinghouse President Steve Tritch described the deal for third-generation AP1000 reactors as “multibillion-dollar contracts,” but said the Chinese buyers asked the company not to disclose details. The deal has been estimated at around $8bn.
The deal calls for Westinghouse to hand over technology for the AP1000 to China’s government-owned State Nuclear Power Technology Corp., making it the basis for Chinese efforts to develop a nuclear industry.
“The signing of these contracts is a grand event for the development of China’s nuclear industry,” Chinese Vice Premier Zeng Peiyan told Tritch before the contract-signing ceremony.
Westinghouse, headquartered in Pittsburgh, USA was acquired last year by Japan’s Toshiba, which holds a 77 per cent stake. Baton Rouge, Louisiana-based engineering company Shaw Group Inc. owns 20 per cent and Ishikawajima Harima Heavy Industries of Japan has a 3 per cent stake. Shaw said it would provide engineering and other services on the Chinese power projects, and its said its share of the work would be worth about $700 m.
US, European and Russian suppliers of nuclear power technology have all been vying to land contracts in China, where as many as 32 nuclear plants are expected to be built by 2020 as it tries to meet surging power demands while cutting emissions and reducing reliance on imported oil. Both American and French politicians lobbied Beijing hard on behalf of their companies.
China is the world’s second-largest power consumer after the United States and the third-largest oil importer.
Government plans call for nuclear plants to supply 4 per cent of China’s power needs by 2020, up from 2 per cent last year. Beijing also is promoting solar, wind and other renewable energy but is expected to continue to rely heavily on coal and oil.
The Chinese government said earlier it picked Westinghouse due to its technology, its promise to transfer expertise and the prospects for developing local technology.
China and other Asian governments frequently require foreign companies to transfer technology to local partners as a condition of large orders.
“We will transfer basically the complete technology to allow the Chinese to eventually become self-sufficient and eventually apply this technology themselves within China,” Tritch told reporters.
Asked whether Westinghouse was concerned that such transfers might help China develop into a competitor in export markets, Tritch said, “not really.” He said demand for technology is forecast to be so robust that Westinghouse will have plenty of orders.
The new Westinghouse plants are to be built in pairs in the eastern cities of Sanmen in Zhejiang province and Haiyang in Shandong province, both rapidly growing areas. Construction is to start in 2009 and reactors are scheduled to come on line between 2013 and 2015, Westinghouse said.
Westinghouse says the AP1000 is superior to previous reactors because it uses less cable, piping and valves, cutting costs and reducing the need for large cooling towers and other equipment. The company says it increases safety by using gravity instead of mechanical pumps to deliver cooling water to the reactor in an emergency.