China Eyes AP1000 Reactor; US Export License Ruling Nears

Dow Jones & Company, Inc. - Oct 18

BEIJING -(Dow Jones)- U.S. Nuclear Regulatory Commission Chairman Nils Diaz said Tuesday that a decision on export licensing for Westinghouse's AP1000 nuclear reactor technology is expected within a few months, clearing the path for China to become one of the first customers.

Asked whether China could possibly construct a power plant using the AP1000 reactor before its use in the U.S., Diaz told reporters: "That's correct."

Diaz said the U.S. Nuclear Regulatory Commission is now in the process of determining the fate of the export license for the AP1000, adding that there he has so far found no significant opposition within the agency.

"The commission will actually vote on this issue hopefully in the next few months," he told a news briefing during a visit to China . "We don't see any problems with the AP1000 export license because most of the problems have already been solved."

Westinghouse Electric Co., the U.S. unit of state-run British Nuclear Fuels PLC (BNF.YY) of the U.K., estimates new AP1000 plants would cost about $1,000 to $1,200 per kilowatt.

That would put the price tag on a large two-reactor plant at between $2.2 billion and $2.7 billion .

China plans to quadruple the amount of energy generated by nuclear power plants within the next 15 years to help meet a growing demand for electricity that is already causing widespread shortages.

The government has approved stepping up construction of 1,000-megawatt nuclear power plants at an average of two a year in the next 15 years to meet a 2020 target of reaching total installed capacity of 36,000 MW.

As part of that plan, China plans to buy four new reactors and is expected to solicit bids soon for low maintenance, high safety reactor designs including the Westinghouse 1,100 MW AP1000 reactor, an advanced design that is still waiting approval from the U.S. Nuclear Regulatory Commission.

Its AP1000 technology is expected to compete with reactors designed by Framatome - a joint venture between France's Areva SA (4524.FR) and Germany's Siemens AG (SI), and AtomStroyExport of Russia for the Chinese contract.

"My understanding is that China is looking for an advanced reactor that provides greater assurance of safety, reactors that have more passive features, looking for less personnel involvement and less safety systems," Diaz said.

"They are looking for a reactor with reduced maintainence, reduced monitoring, something that is the state-of-the-art and the AP1000 is a state-of-the-art reactor."

-By Owen Brown , Dow Jones Newswires; 8610 6588-5848; owen.brown@dowjones.com

-Edited by Sharon Buan

Dow Jones Newswires 10-18-04 2346ET