$5 Billion Ex-Im Bank Backing for Westinghouse in Bidding for Four Chinese Nuclear Power Plants

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The export credit agencies of all major industrial nations are putting their very best feet forward to assist national companies in competing for strategic footholds in long-term development markets. The biggest prizes in this competition are in China, and the power generation sector is a major element in the scenario, with total power generation capacity set to approach the one million megawatt mark by 2020, representing about a threefold increase over present capacity. Within this picture, it is currently estimated that nuclear power generation projects will contribute less than 5% of the country's total power supply in 2020. But there are international indications that new generation III+ and IV nuclear technology plants could corner a larger slice of new power projects. Reflecting this trend, the Chinese government has declared a shift in policy, to increase the proportion of nuclear power in the overall mix.

In the bidding for four new nuclear power plants to be built at two sites, Sanmen in Zhejiang province southwest of Shanghai, and Yangjiang in Guangdong province, southwest of Hong Kong, The U.S. Export-Import Bank (Ex-Im Bank) has approved a preliminary commitment request from Westinghouse Electric Company (Monroeville, Pennsylvania) for a combination of guaranteed and/or direct loans of up to $5 billion in support of the company's bid to construct the nuclear power plants. For related news item see - September 29, 2004 - China's Tenders for Four Nuclear Plant Package Offer Winner Construction and Technology Boom Through 2020.

The Ex-Im Bank commitment and the U.S. exporters' bid will be delivered in a response to a 'request for proposals' issued by the Chinese government. Bechtel Power Corporation (San Francisco, California) will be a significant member of the bidding group with many smaller businesses as sub-contracting suppliers. If successful, the Westinghouse-led bid could generate 5,000 jobs in the U.S., where the design and engineering and plant control systems of the plants would be executed. The Chinese now require that 70% of power plant components be made locally, in order to develop the skills and technical knowledge in the domestic nuclear industry.

Aggressive competition for the four power station contract is expected to come from Areva (Paris:CEI) (Paris, France) and Siemens (NYSE:SI) (Munich, Germany) with their 1,600 MW light water moderated reactor and Atomstroyexport (ASE) (Moscow, Russia), with the VVER light water moderated reactor. Westinghouse will be weighing in with the recently NRC-certificated AP 1,000 light water moderated reactor. The French company, Areva, already has a number of reactors operating in China through its Framatome (Lynchburg, Virginia) associate and the Russians have VVER 1,000s at the Tianucon power station, now under construction. Initial bids will be lodged by February 28, 2005, with a further detailed evaluation of the Ex-Im Bank loan-taking place at the final evaluation stage and a final contract decision from the Chinese in the last quarter of 2005.

While inspecting the Dayawan nuclear power plant recently, Chinese premier Wen Jiabao said that all nuclear projects should be constructed on the principle of putting security and quality first. Relevant regulations and systems should be improved, and nuclear accident emergency systems should be built as soon as possible.

The Westinghouse AP1000 has a passive safety system, which is significantly simpler than the traditional pressurized water reactor (PWR) systems from which it has developed. The new Generation III+ reactor does not require the large network of safety support systems needed in typical nuclear plants such as AC power, HVAC (heating, ventilation, air conditioning), cooling water systems and seismic buildings to house these components. Compared to a similar sized conventional PWR plant, the AP 1000 has 50% fewer valves, 83% less piping, 87% less control cable, 35% fewer pumps and 50 % less seismic building volume, Westinghouse claims. For related news item - see February 22, 2005 - Framatome ANP Joins Development of Next Generation Nuclear Reactors for the Reinvigorated US Nuclear Power Plant Development

(Some market sources are aware that Westinghouse could be up for sale, as the U.K. government changes BNFL's focus to site clearing actions, although there is a growing lobby in the U.K. for a fresh look at nuclear potential as a 'clean' and reliable power source)

View Project Report - 88000329 88000331 88000457 88000458 88000470 88000478 88000725 88000773

These projects are part of more than 130 nuclear power plant projects, representing about $50 billion in TIV, that Industrialinfo.com is tracking worldwide, as part of its Power Generation Database. Click on the image at right to view a breakdown of these projects by country.

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