Westinghouse Seals Mega China Nuclear Deal
BEIJING -- U.S.-based Westinghouse Electric signed on Tuesday a multi-billion-dollar deal with Chinese partners to build four nuclear reactors in eastern China, finalising a pact agreed between Beijing and Washington seven months ago.
The contract, estimated in the past at close to $8 billion, is expected to warm relations between the world's top energy users amid recent disputes over issues from the yuan currency and China's bloated trade surplus.
"The definitive contracts signed today will result in the first-ever deployment of advanced U.S. nuclear power technology in China," Westinghouse President and CEO Steve Tritch said at the signing ceremony at Beijing's Great Hall of the People.
Construction will begin in 2009, with the first plant slated for operation in 2013 and the remaining three coming on line in the next two years, Westinghouse said in a statement.
It did not give specific financial terms but said the deal would create some 5,000 jobs in at least 20 states in the United States.
Westinghouse, owned by Japan's Toshiba Corp., will build four 1.1-gigawatt reactors using its advanced AP1000 design, a technology the Pittsburgh-based company said is the basis for nearly half of the world's operating nuclear plants.
The deal will reaffirm China -- now a laggard in the nuclear sector -- at the forefront of a global trend towards increased use of atomic power, touted by many nations as the cleanest and cheapest solution to the world's strained energy industry.
But fears about nuclear safety have resurfaced after an earthquake hit Japan last week, causing leaks of water with low-level radiation from the world's largest nuclear power plant.
China, determined to boost nuclear fuel to power its booming economy, has delicately balanced competing offers from the United States, France and Russia to sell technology into its expanding market.
Shortly after picking Westinghouse last December as winner for the four plants, Beijing quietly awarded French state-run Areva another two reactors in southern China in a preliminary deal worth about $5 billion.
China was also in talks with Russia for possible participation in expanding a nuclear power plant in eastern Jiangsu province, built by Atomstroiexport and started up earlier this year, official media reported.
"Big deals like nuclear plants have more political elements than economic," said a senior Chinese industry official.
Westinghouse and its engineering partner Shaw Group Inc. will build two reactors in Haiyang city of Shandong province and another two in Zhejiang province's Sanmen city.
China Power Investment Corp. (CPIC), parent of Hong Kong-listed China Power International Development Ltd., will be the lead investor for the Shandong plant, and China National Nuclear Corp. (CNNC) the main investor in Zhejiang.
China, the world's second-largest energy consumer, plans to spend some $50 billion adding around 30 reactors by 2020, raising its installed nuclear capacity to 40 GW, nearly enough to power Spain.
That would be around 4 percent of the country's power capacity, compared with just over 2 percent at present, but still far behind the three-quarters in France and one quarter in Japan.
China currently has only 10 working reactors, which generated a total of 26.53 billion kilowatt hours of electricity in the first half of 2007, or 3.7 percent more than a year ago, official output data showed. The country relies on coal for over 80 percent of its electricity.