PITTSBURGH: Westinghouse Electric Co. bagged a multibillion dollar nuclear power contract from the Chinese government, beating several French and Russian companies.
The Pittsburgh-based Toshiba Corp.-owned Westinghouse has been vying to secure the contract, estimated at around $8 billion, for the last two years. It is offering one of its advanced technologies, AP1000 in developing four new nuclear power plants in China's Sanmen in Zhejiang province and Yangjiang in Guangdong province.
The other notable competitors were France's Areva and Russia's Atomstroiexport.
The option fell on Westinghouse partly because it is transferring technology and because it has promised to work with the Chinese nuclear energy department to help the country gain self-reliance.
Westinghouse's president and chief executive officer Steve Tritch said in a statement the company is pleased that China has selected its AP1000 technology -- "the very same advanced plant design that is the technology of choice for most of the new plant programs announced to date in the United States." He added that the final contract details are set to be worked out.
The AP1000 technology was fully certified by the U.S. Nuclear Regulatory Commission only last year.
Tritch said Westinghouse will now work with State Nuclear Power Technology Company of China to forge a long-term relationship that will be in the best of interests of all parties, including the citizens and governments of the Peoples Republic of China and the United States.
Westinghouse, which had the world's largest installed base of operating nuclear power plants, said the contract will create or sustain nearly 5.000 well-paying jobs in the design, engineering and manufacturing sectors in the U.S.
A memorandum of agreement was signed Saturday in Beijing in the presence of U.S. energy secretary Samuel Bodman. He said later the deal represents a major step forward in the relations between the U.S. and China and will advance the bilateral trade relationship and the energy security of both the countries. He also said the agreement would help the U.S. balance of payments. The U.S. had a $202 billion trade deficit with China in 2006.
China proposes to build 1.1 gigawatt plants using the AP1000 design. Westinghouse estimates that the capital costs for the reactor will be around $1,200 per kilowatt, which would take the total expenditure to about $5.3 billion. The units are expected to become operational in 2013.
China is targeting to spend nearly $50 billion in building new nuclear power plants by 2020 in order to make for its slow start in this sector. Currently, it has nine working reactors.
