Vendors’ views Westinghouse

1 October 1998

The coming decade is a vital one for the nuclear power industry. With many old plants coming to the end of their operating lives, decisions will soon have to be made regarding what form of power generation will replace them. NEI asked the major vending companies to answer questions addressing the issues most likely to effect the industry’s future.

1.The continued safe, economic performance of today’s operating nuclear plants is a key goal in a successful landscape for nuclear energy. We will help accomplish these goals by expanding our investment in and commitment to our core businesses: fuel and service. We’ll also pursue new plant opportunities in instances where it makes sense to do so.

2. Clearly, China represents the biggest and best opportunity for new plant construction over the short term. However, there are opportunities on a smaller scale in other parts of Asia and Europe. Longer term, we fully expect a resurgence of the US market for new plants as concern for the environment and an inevitable need for new base-load generating capacity materialises.

We believe we can grow our core fuel, service and instrumentation and control businesses, primarily by developing new and innovative ways to work with our customers to help them make their plants more economical and cost competitive. Specifically, I am talking about the formation of alliances, plant engineering networks, and joint service companies comprised of utilities, suppliers, and even competitors.

3. In China, the world’s fastest growing economy even in spite of the Asian economic crisis, there are still more than 100 million people who do not have electricity in their homes. Clearly, there is a need there for both short-term, base-load capacity and, over the intermediate and long term, a need for new generating capacity in the outlying provinces.

4. Our fuel, service and I&C businesses for operating plants are all solid with good growth prospects, even if the new plant market does not materialise as we think that it will.

5.That’s difficult to answer. I can say, however, that it will be impossible to achieve the Kyoto protocol goals without nuclear power. In other words, I fully expect that we and our competitors will be involved in new plant supply by 2010. I just can’t quantify it at this point.

6. In the United States, continuing inactivity on the waste bill is clearly the most pressing issue we face. We in the industry must aggressively remind our elected representatives of their obligation in this area. Waste is not a technical issue, it is a political issue. Congress simply has to do its duty.

Licence renewal is an emerging issue, and one that we feel will become even more important as more plants reach their 20 and 25 year operating milestones.

7.I am optimistic but realistic. I believe the new plant market in China and elsewhere will provide opportunities over the next few years. I also believe that the market for new plants in the United States will come back as it becomes clear that the best way to improve the environment and to reduce greenhouse gases is to replace our ageing fossil plants with clean, economical nuclear power.

However, even without significant new plant development, we think there are growth opportunities in the fuel, service and I&C segments.

8. Our AP600, which received final design approval from the US NRC in September, is the most notable. It is designed to be extremely competitive both in terms of construction costs and operational costs. It’s simpler, safer and more efficient.

However, we must not overlook the technological and management advancements that continue to make existing plants more efficient.

9. Did not answer.

10. The Kyoto Conference stopped just short of endorsing nuclear power as a solution to greenhouse gases and global warming. Still, that conference did generate new interest in nuclear power. As I mentioned earlier, China’s plan to give nuclear a larger role is in large part based on environmental concerns.

Each company received the following questions:

1. What activities are likely to be the most important to your business in the next decade? 2. In which parts of the world, if any, do you see expansion of the industry? More particularly, where is there potential for new plant construction? 3. What are the reasons why there is likely to be expansion in these regions and not in others? 4. What other markets are there likely to be for your products and services? 5. In 2010, what proportion of your business is likely to be in construction of new plant, compared with other activities? 6. What issues do you think are likely to be most important in shaping your future business and what do you consider to be the greatest uncertainties? 7. Are you optimistic or pessimistic about the future of the industry? 8. What new technologies and projects are you working on which could help nuclear power to compete in privatised markets? 9. How likely is it that advanced reactor concepts, such as fast reactors, will become competitive? What factors will be important to their development? 10. In 1990 a number of vendors cited increasing environmental concerns, in particular the connection between fossil fuel power and the greenhouse effect, as an important factor in encouraging new reactor orders around the world. Are there signs that this is happening?

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