02/04 N-reactor builders fret about loss of business

Takeshi Kurihara, Kensuke Nakazawa and Taro Koyano / Yomiuri Shimbun Staff Writers

U.S. and European nuclear reactor builders increasingly are concerned about the situation at the Fukushima No. 1 nuclear power plant because a prolonged crisis could force countries worldwide to change their policies on nuclear power and eventually deal a heavy blow to their business.

Apparently stemming from this concern, visiting French President Nicolas Sarkozy and Areva SA, a French major nuclear reactor maker, on Thursday announced support for Japan's response to the series of accidents at the nuclear power plant following the massive quake and tsunami.

During talks with Economy, Trade and Industry Minister Banri Kaieda in Tokyo, Anne Lauvergeon, chief executive officer of Areva, said she recognized that the problems at the Tokyo Electric Power Co. nuclear plant are not only Japan's but her company's as well. She said Areva would provide maximum support to Japan.

Areva, which has tie-ups with Mitsubishi Heavy Industries, Ltd. and has won many contracts to build nuclear power plants in France, where nuclear power is the primary source of electricity, agreed with Chinese companies in November and December to supply them with uranium. The company also recently signed a deal with India to manufacture nuclear reactors.

Areva has aggressively expanded its business, stepping up marketing efforts to sell its nuclear power plants in Jordan, Saudi Arabia and other Middle Eastern countries this year.

However, the business environment changed significantly after the series of accidents at the Fukushima No. 1 nuclear power plant. China temporarily suspended new nuclear power plant projects while antinuclear power plant movements had a resurgence in Europe.

The crisis has depressed Areva stock, which dropped 12.8 percent from the 35.95 euros (4,257 yen) posted on March 10, the day before the quake, to 31.35 euros at Wednesday's close in Paris.

With environmental awareness rising, nuclear power plants, which do not emit carbon dioxide, had been again viewed as a clean energy source, and plant construction had been accelerating until just recently.

However, the nuclear power boom seems to be quickly fading in the United States in the wake of the series of accidents at the Fukushima facility.

General Electric Co. of the United States, which has a tie-up with Hitachi, Ltd., manufactured the Fukushima No. 1 plant's Nos. 1 and 2 reactors and their turbines. The accidents might deal a serious blow to GE.

GE hastily moved to deny liability for the reactors, saying the size of the March 11 earthquake was far larger than the assumptions when they were designed in the 1960s.

GE's stock has fallen about 7 percent from the 20 dollars (1,670 yen) level seen on March 11.

About 30 nuclear reactors were set to be built by 2030 in the United States, where plant construction had long been frozen after the 1979 Three Mile Island nuclear accident.

However, the U.S. Congress has been cautious about advancing the planned projects, with Sen. Joe Lieberman saying the United States should "put the brakes on" new nuclear power plants.

GE set a target of winning 38 nuclear reactor projects by 2030 while Westinghouse Electric Co., which is a subsidiary of Toshiba Corp., was aiming to win contracts to build 39 reactors by 2015.

Sources close to the companies said their plans would inevitably be delayed due to the March 11 earthquake.

If troubles worsened at the Fukushima No. 1 nuclear power plant, the companies would be forced to revise their outlook and their financial performance might be seriously affected as a result, observers said.

(Nakazawa is a correspondent in London and Koyano is a correspondent in New York. Kurihara is a Yomiuri Shimbun staff writer.)

(Apr. 2, 2011)