Global Alliances Forming to Meet Next Generation Nuclear Reactor Construction Plans through 2030

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Researched by Industrial Info Resources (Sugar Land, Texas). The rising price of uranium, which is up 60% in the last six months from $45/lb to $72/lb, continues to be driven by the ongoing announcements of costly reactor construction plans and technology sharing agreements worldwide.

Japan’s Toshiba (NYSE:TOSBF.PK ) (Tokyo) is at the center of a number of new agreements and discussions looking to the construction of new generation reactors. In the first week of January, the company announced that it was pursuing an independent course in the design of a new boiling water reactor (BWR) and was at the preliminary conceptual design stage for this next generation reactor, which it aims to be able to market by 2015. Toshiba said the new design reactor was aimed primarily at the domestic market where the current generation of rectors would need upgrading from 2030.

Over the past 40 years, the Japanese company has developed its nuclear reactor business together with General Electric (NYSE:GE ) (Fairfield, Connecticut). In October 2006, Toshiba led a $5.4 billion takeover of the U.K. nuclear reactor company Westinghouse Electric, which is pursuing the pressurized water (PWR) technology.

In November 2006, GE and Hitachi (NYSE:JP:6501) (Tokyo, Japan) agreed to form an association with a view to integrating nuclear operations after the two companies had made an unsuccessful joint bid for Westinghouse. The successful bidder and GE and Hitachi are currently playing down the prospect of becoming rivals in the market as they are both developing BWR technology.

Currently, PWRs and BWRs are both operating worldwide with the claim being made that BWRs, and their future development models, are considered to be inherently safer as the use a simpler design model compared to the PWRs. The contest will take at least a decade to play itself out in the field.

The Russian nuclear company Atomprom is looking to begin talks with Toshiba and IHI (NYSE:IHI.IL ) (Tokyo, Japan) to supply steam turbines and generators for Russia’s nuclear program. A key element of the possible agreement will involve Japanese investment in Atomprom and the transfer of nuclear technology to the Russian state-owned company.

The Japanese and U.S. governments have agreed in the first days of 2007 to jointly finance the construction of nuclear power plants in the U.S. with Washington providing debt guarantees and Tokyo the trade insurance. This follows on from the U.S. administration’s decision in 2006 to promote the construction of new nuclear power plants with more than 30 now under consideration in the country. Estimated costs for the construction of each plant varies between $2.5 billion to $3.4 billion and the U.S. Energy Department will establish a system that will provide debt guarantees covering about 80% of the costs. The Japanese government will indirectly assist U.S. nuclear plant construction companies by providing trade insurance that would compensate Japanese firms for losses suffered through overseas investment and trading for the remaining 20% of nuclear plant construction costs. For related news item see December 20, 2006 – Westinghouse Reactor Deal with China First Lap in $50 Billion Nuclear Program.

By 2012, the French government says that it will be ready to decide on the type of technology to be used in the country’s fourth generation reactor program from which it aims to have a reactor ready by 2020. In the initial stages of the project, research will be conducted into materials, fuel, operation, in-service inspection, and maintenance as well as facilities for reprocessing spent fuel from the proposed reactor. France is also playing a leading role in the development of the third generation European Pressurized Water Reactor (EPR) that is intended to replace the 58 reactors in the country’s nineteen nuclear power plants. Almost 78% of France’s electricity is supplied by nuclear power.

In another new nuclear reactor initiative, the Indian Atomic Energy Commission has announced that construction of the first advanced heavy water reactor (AHWR) will start this year marking the launch of stage 3 of the country’s nuclear program. The thorium-based AHWR is currently undergoing pre-licensing review by the Atomic Energy Regulatory Board. The demonstrator reactor will take about five to six years to complete and will cost between $23.5 and $28 million per megawatt of power generated. The site for the reactor has not been announced. The project aims to meet the objectives of using thorium fuel cycles for commercial power generation.

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