Indo-US Business l Bi-monthly l   Issue: Dec08-Jan09
 

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N-Deal Off To Flying Start
Mission Accomplished

By Satya Swaroop & Sunetra Nair

The recent visit to India of the high-powered US Nuclear Trade Mission has been a stupendous success, thanks to perseverance and dedication of purpose on the part of the mission members and its facilitators the US-India Business Council and the Nuclear Energy Institute (NEI). The Mission deserved credit for persisting with its visit in December, despite the terrorist attacks that rocked Mumbai, India's commercial capital, a few days earlier, on 26 November, 2008. “The robust presence here of the US commercial nuclear industry, so soon after the unfortunate events in Mumbai, speaks to the commitment of our companies to partner with India in the coming nuclear renaissance,” said Ted Jones, Director for Policy Advocacy at USIBC. In fact, in the words of Steve Hucik, Senior Vice President, GE-Hitachi Nuclear Energy and leader of the Mission which concluded its five-day India visit on December 16 in Mumbai, the Indo-US civilian nuclear energy deal has got off to a flying start. The Mission's objective of exploring the opportunities in India and what the US firms could offer their Indian counterparts in terms of the state-of-the-art technology appears to have been achieved if some of the observations by the delegates are any indication. The reputed nuclear equipment maker Westinghouse Electric Company has announced that its participation in the nuclear trade mission is the beginning of a long and mutually rewarding relationship with a wide range of Indian power companies, suppliers and academic institutions. Westinghouse plans to enter the Indian nuclear market with its AP 1000 Plant. And very rightly, US Consul General in Mumbai Paul Folmsbee said, “the US and India make excellent partners in the field of nuclear energy.”
 

In a significant move that may trigger nuclear commerce on a massive scale between India and the United States, American companies showcased their advanced technological might in this field during the mission's visits to the various Indian nuclear centers from 11th to 16th January, 2009.

With more than 60 top executives representing more than 30 world-leading commercial nuclear companies, the Mission was the first commercial nuclear trade team to visit India since the Nuclear Suppliers Group (NSG) approved India for global commercial nuclear trade. It was also the largest ever mission mounted by USIBC. It comprised decision-makers from General Electric, Westinghouse, Bechtel Nuclear, the Shaw Group, Babcock & Wilcox, Black & Veatch, Fluor, CH2M
Hill, Curtiss-Wright, Holtec International, Uranium One, Thorium Power, Cameco, Converdyn and USEC, among others.

The USIBC-NEI Mission met with key Government of India officials and the top executives of the Nuclear Power Corporation, the National Thermal Power Corporation, and other leading public-sector undertakings. They also met with their counterparts among India's rising global companies through the Task Force on Commercial Nuclear Cooperation, a group set up with the initiative of the USIBC which has met since 2006 to identify and clear obstacles to US-Indian commercial nuclear trade.

The Task Force identified policy issues on both sides requiring attention in order for India to move toward its ambitious goals for expanding its nuclear generating capacity to 30,000 MW by 2020 and 60,000 MW by 2030. To enable Indian and US private-sector companies alike to take part in the expansion, issues relating to nuclear liability and intellectual property protection, among others, need attention in India. On the US side, the group has previously discussed US export licensing procedures and the potential for US companies to enter into commercial relationships with Indian manufacturing, contracting and service firms.

“We have considerable work yet to do, but we are happy to be at the stage of commercial engagement,” said Jones.

The US commercial nuclear industry leads the world in size, performance, innovation, and engineering worldwide. The US is the largest generator of nuclear electric power in the world with 27 percent of the world's total installed capacity and nearly double the number of reactors as France. The US also produces at roughly 1/2 to 1/3 of the cost in other major countries. In recent decades, US reactor companies and civil nuclear engineering companies have remained at the forefront of innovation and engineering worldwide.

The US nuclear trade mission was to have visited India in December, 2008 but its itinerary was rescheduled due to the terrorist attacks in Mumbai, the commercial capital of India, on 26 November. This is the first nuclear delegation to visit India after the signing of its historic nuclear deal with the US on October 11, 2008 in Washington. The intent of this visit is to establish an advantage in the projected $150 billion business potential with India.

The message is clear; it's nuclear commerce. The US, whose economy is passing through an unprecedented downturn, is keen to take advantage of energy-starved India's potential to help its own nuclear energy industry. It's a win-win situation for both India and the US. But the bigger winner is the nuclear commerce and trade across the globe, with benefits percolating down to each and every member of the 45-member Nuclear Suppliers' Group (NSG).

The US is keen to be among the first major players to take advantage of the deal it has signed with India. France, the bulk of whose energy requirements are met by nuclear power and Russia have also signed a civilian N-pact with India.

The main purpose of the Mission, comprising major nuclear reactor technology manufacturers, nuclear energy engineering and consulting firms, suppliers of nuclear fuel, conversion technologies and radiation analysis experts, is to spur commercial activity in both India and the US.

It may be noted that the US nuclear energy industry has been rather inactive for more than three decades, with not a single plant having come up during this period. Now that the US initiative has been launched, there will be a deluge, with most other countries falling in line. After all, nuclear energy is the best deterrent to the effects of global warming, with its effectiveness to reduce carbon emissions across the globe.

US Consul General Paul Folmsbee described the historic Indo-US civilian nuclear energy agreement as one of the great legacies of the Bush Administration. Speaking at a function marking the successful conclusion of the Mission, he told the audience, “Thank you for joining us today on the "rubber meets the road" part of the historic civil nuclear agreement between India and the United States. India's inclusion under the global nuclear umbrella is a historic step, one that resulted from a lot of hard work and honest dialogue between not just Indians and Americans, but concerned and responsible partners around the world. For the United States, this historic agreement will be one of the great legacies of the Bush Administration.

“We know that curbing climate change, perfecting clean energy technologies, and providing for the next generation's energy needs in a responsible, safe, environmentally friendly way is a top priority. We know this is a priority for India's government, industry, and people as well. So it will be a key part of the United States-India partnership.

“That is why we are delighted that our civil nuclear industry leaders are here in India this week, and that they will be sharing information about the products, technologies, and services that have served our country well. Obviously, each plant built in India will have a significant India component, from parts and technology to engineering and labor. The enthusiasm of Indian companies for nuclear commerce partnerships is evidence of this huge potential. So we think that our two countries make excellent partners in the nuclear energy field .

Folmsbee listed the strong features of the US the nuclear power industry. These include:

• The US has a world class nuclear industry 27 percent power is generated through clean nuclear technology.
• When our companies compete for these contracts, they will be successful because they offer the best technology and reliability.
• The US welcomes competition, because we feel our products stand on their merits.
• The US Civil Nuclear Energy Industry is the world leader in engineering and has been active in upgrading plants and expanding capacity in existing plants in the United States, as well as building new plants and capacities in East Asia and Europe.
• US nuclear reactors have the world's highest average efficiency rate at 91%
• The United States today obtains 19.4 percent of its total generated electricity from clean nuclear power.
The United States ranks number one worldwide in terms of:
• Total number of operating nuclear reactor units
• (24 percent of world total - 104 in US out of 439 worldwide);
• total nuclear power capacity in Megawatts
• (27 percent of world total - 100,582 MW in US out of 372,100 MW worldwide);
• Total amount of electricity generated by nuclear power annually (31 percent of world total; 806.5 Billion of kilowatt-hours Bkwh out of 2,608 Bkwh worldwide).

“All of this spells good news for both our countries. I congratulate all those who have worked so hard to bring us to this point, and who will take us forward from here in the development of India's civil nuclear industry,” Folmsbee said.

Westinghouse to Market AP1000 Plant
Nuclear equipment maker Westinghouse Electric Company has announced that it expects that its participation in the nuclear trade mission to India will be the beginning of a long and mutually rewarding relationship with a wide range of Indian power companies, suppliers and academic institutions.

Addressing a press conference in Mumbai Ms Meena Mutyala, Vice President and business leader, India, for Westinghouse, said the company views the market in India in the most favorable light. "With 17 operating plants and six under construction, India's nuclear infrastructure is vibrant," she said. "The demand for new nuclear generation is high and we are pleased to be able to participate in providing electricity to this fast-growing economy, and we will do so in a manner that further strengthens India's already-solid nuclear power infrastructure.”

WEC's Director (Global Business Development) Robert Pearce said , "We will invest tens of millions of dollars as a minimum to tap India's nuclear power sector," Westinghouse Electric Company, a group company of Toshiba Corporation, is the world's pioneering nuclear power company and is a leading supplier of nuclear plant products and technologies to utilities throughout the world. Westinghouse supplied the world's first PWR in 1957 in Shipping port, Pa. Today, Westinghouse technology is the basis for well over 40 percent of the world's operating nuclear plants, including 60 percent of those in the United States.

Pearce said that WEC might look at forging joint venture with local players, sourcing from them and even outright acquisitions in areas like engineering, construction and equipment making. "We are in talks with the local players, but nothing has been finalized yet," he said adding that the company would focus on "as much as localisation as possible" for its business here in line with other global markets including China.

Ms. Mutyala said Westinghouse will enter the market in India with its API000™ nuclear power plant. "Our intent is to use in-country resources in the deployment of API 1000s in India, and to qualify suppliers in India to assist Westinghouse in the construction of API 1000s elsewhere in the world," she said. "Toward that end, we will develop long-term relationships and partnerships with industrial companies, design firms, and academic institutions.”

The AP1000, design certified by the NRC in early 2006, is fast becoming the technology of choice in key markets throughout the world. In December 2006, China's State Nuclear Power Technology Corporation selected Westinghouse to provide two API 1000s each at both the Sanmen and Haiyang sites. Contracts for those plants were signed in July 2007. In the United States, the API 000 is the announced technology of choice for no less than 14 new plants, including six for which Engineering, Procurement and Construction contracts have been signed.

"Essentially, the AP1000 is the identified technology for one-half of the plants announced in the United States," she said. "We attribute this worldwide success to the numerous safety and operational benefits of the AP1000 and to our business model, which mandates that we source as much as possible from the countries and regions in which we are building new plants.”

Westinghouse believes the AP1000 is ideally suited for the worldwide nuclear power marketplace, as it is:
• A passively safe design that employs natural forces - natural circulation, gravity, convection and compressed gas - to maintain safety in the highly unlikely event of an accident.
• Based on standard Westinghouse pressurized water reactor (PWR) technology that has achieved more than 2,500 reactor years of highly successful operation.
• An 1100 MW design that is ideal for providing base load generating capacity.
• Modular in design, promoting ready standardization and high construction quality.
• Economical to construct and maintain (less concrete and steel and fewer components and systems mean there is less to install, inspect and maintain).
• Designed to promote ease of operation (features most advanced instrumentation and control (I&C) in the industry).

WEC offers a wide range of nuclear plant products and services to utilities throughout the world, including fuel, service and maintenance, instrumentation and control and advanced nuclear plant designs. Its technology is the basis for well over 40 percent of the world's operating nuclear power plants, including 60 per cent of those in the United States.

WEC has already inked a Memorandum of Understanding (MoU) with the domestic engineering and construction major Larsen & Toubro (L&T) to build 1,000 MW pressurized nuclear power plants in India.

B&W Poised to Play a Major Role

The Babcock & Wilcox Company (B&W), another leading member of the US trade mission. B&W, a major operating subsidiary of McDermott International, is a leader in advanced energy technology innovation and service, primarily in nuclear and fossil power. Providing quality products and technical services to commercial and government customers, B&W is focused on issues such as energy efficiency, clean air, global market competitiveness, and safe and secure resolution for nuclear waste. B&W has locations worldwide and employs more than 20,000 people.

B&W has strong ties to India's power sector that span more than 20 years. Through its relationship with Thermax Limited, B&W has worked with Indian industry to build power plants that operate across the country. Earlier this year, Thermax and B&W announced a new technology transfer license agreement that gives Thermax the right to engineer, manufacture and sell B&W subcritical pressure radiant utility boilers in India.

"B&W is backed by more than 140 years of experience, and we have a distinguished history in nuclear power that dates back to its inception," said Brandon Bethards, B&W's Chief Executive Officer. "We have world-class nuclear component manufacturing facilities and a strong commitment to safety, quality and performance. We recognize these are key tenets of India's nuclear power programs, and we look forward to working with India as they begin to add more nuclear generation."

"The historic US-lndia nuclear deal opens up tremendous opportunities for both Indian and US business," said Craig Hansen, B&W's Vice President of Washington Operations and a member of the delegation that travelled to India. “With demand for carbon-free electricity rapidly increasing, nuclear power is clearly going to play a large role. India has the skilled workforce, a robust existing nuclear industry, and the commitment necessary to manage complex technical operations. B&W would like to work with the Indian industry to build capacity to supply their own nuclear growth while developing an export capability to serve rapidly expanding markets.”