Japan's nuclear companies look to foreign projects

2 November 2015

With nuclear construction effectively frozen in Japan, in the wake of Fukushima, Japanese nuclear power businesses increasingly are turning their eyes abroad, The Nikkei reported. Engineering companies and general contractors are following, racing to carve out slices of the construction market.

Japanese engineering company JGC is to become involved in NPP construction, including projects to build four reactors in the UK led by Hitachi-GE. Construction of two reactors at the Wylfa site is set to begin in 2019 for start-up in 2024. JGC has been in talks with Hitachi to handle construction of the building housing the first reactor.

Hitachi will provide the reactor and other core components, while JGC expects to work with US engineering firm Bechtel on the containment building and other aspects of the project. Construction costs will account for 70-80% of the first reactor's budget of around GBP5bn ($7.7bn) and JGC could be contracted for 20-30% of that.

While JGC lacks experience with NPP construction in Japan but has expertise building power plants and other energy-industry facilities in the Middle East and Asia. It has proven capable of handling large-scale tasks including oversight of thousands of foreign workers and procurement of construction materials in quantity. JGC hopes to involve itself in construction of other reactors in the UK, as well as overseas projects led by other companies, The Nikkei said. Hitachi is also seeking contracts in Lithuania, Poland and elsewhere.

The UK Office for Nuclear Regulation (ONR) on 30 October completed the third step of the generic design assessment (GDA) of Hitachi-GE's UK advanced boiling water reactor (UK ABWR) NPP. ONR said "sufficient progress" has been made by Hitachi-GE to move into the final assessment stage, which Hitachi-GE expects to complete in December 2017. The third step of the looked at the safety and security arguments presented by Hitachi-GE "to underpin the safety and security claims". ONR's head of GDA Jane Bowie said: "We are now ready to start the fourth and final step of the assessment process.

The next milestone in the GDA process will be the start of the Environment Agency's and Natural Resources Wales consultation on the environmental part of the assessment for the Wylfa plant on the Isle of Anglesey in Wales, which is planned to start in October 2016, the ONR said. UK nuclear developer Horizon Nuclear Power also plans to build UK ABWRs at Oldbury-on-Severn.

Meanwhile, Japanese construction companies Taisei, Obayashi and others have teamed to win orders for parts of a Turkish nuclear project led by Mitsubishi Heavy Industries MHI, jointly with France's Areva, including the reactor building. MHI announced on 30 October that it plans to invest in Areva NP, the nuclear plant unit of France's Areva, although talks are expected to continue for a few more months. MHI aims to reach a basic agreement by around next February, company president Shunichi Miyanaga said at a press briefing. Areva has "very high technical strength," Miyanaga said, adding Mitsubishi Heavy expects a significant return on the investment.

Miyanaga also said MHI is considering buying the stake in the parent Areva, suggesting potential technical cooperation in decommissioning the Fukushima Daiichi NPP. Areva and French utility EDF, both of which are largely owned by the French government, have been asking Mitsubishi Heavy to invest. EDF has announced plans to own 51-75% of Areva NP.

MHI and Areva are already jointly developing an advanced medium-size nuclear reactor, Atmea 1, which is planned for construction at Turkey's second NPP.

Japan's other major nuclear company, Toshiba, through its US-based Westinghouse subsidiary, recently undertook to acquire from CB&I the business of engineering, construction, procurement, management, design, installation and commissioning of US NPPs at VC Summer in South Carolina, the Vogtle in Georgia, as well as projects in China. It will also take over CB&I's nuclear integrated services business, which includes small capital projects for existing US nuclear plants. The purchase will include 11 facilities in the USA and Asia. Upon closing of the transaction - expected by the end of 2015 - Westinghouse will assume full responsibility for all AP1000 reactor projects and the nuclear integrated services business.



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