Areva and Fresno Nuclear Energy Group to Develop EPR Nuclear Reactors in Central Valley, California

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Researched by Industrial Info Resources (Sugar Land, Texas)--French nuclear power company Areva SA (EPA:CEI) (Paris) has signed a letter of intent with the Fresno Nuclear Energy Group (FNEG) to cooperate in the development of one or two EPR-type nuclear reactors in Central Valley, California.

The FNEG was formed by a group of local investors whose mission is "to explore the viability of building a community-owned nuclear power plant." The group hopes that in addition to providing low-cost electricity and reducing the dependence on foreign oil, it can use nuclear power to deliver electricity to power desalination plants to cleanse the groundwater, providing more useable water for agricultural purposes.

The group was formed in response to the high levels of unemployment in the region and by the movement of agricultural-processing facilities out of the state as a result of high energy rates. The group plans to construct two nuclear power plants, each with a generating capacity of 1,600 megawatts and cooled by wastewater from the nearby Fresno Wastewater plant.

Areva and the FNEG will now begin the process of obtaining development consent and permits from the United States Nuclear Regulatory Commission (NRC), with the first stage being the preparation and submission of the technology-specific Early Site Permit. Following this, the two organizations will submit a Combined License application. In 2010, the two companies will begin a series of feasibility studies aimed at finding suitable sites for the proposed power plants.

The Areva EPR reactor is a third-generation pressurized water reactor, and concerns have been raised over safety of this type of reactor. Although several are under construction in various locations across the globe, including Finland, France and China, no EPR reactor has begun commercial generation. As recently as last week, the United Arab Emirates preferred to sign a contract with a South Korean consortium rather than purchase EPR reactors from a French consortium led by Areva.

However, Areva claims that the EPR is safer and more competitive than other types of reactor. The reactor is currently undergoing the Design Certification Application Review process with the NRC, and six U.S. companies have already expressed satisfaction with the reactor and have plans for up to eight EPR construction projects.

AmerenUE, formerly the Union Electric Company, but now a part of the Ameren Corporation (NYSE:AEE) (St. Louis, Missouri); Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina); Amarillo Power (Amarillo, Texas); Alternate Energy Holdings Incorporated (Eagle, Idaho), PPL Corporation (NYSE:PPL) (Allentown, Pennsylvania); and the Constellation Energy Group (NYSE:CEG) (Baltimore, Maryland) have chosen the Areva EPR reactor for their projects.

In addition to these six companies, the EPR reactor also has the backing of Electricite de France SA (EPA:EDF) (EDF) (Paris, France), which has the world's largest installed base of nuclear reactors. EDF is currently installing EPR reactors in France and China, the latter in conjunction with its Chinese partner, state-owned China Guangdong Nuclear Power Group (Shenzhen, China).

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