Mitsubishi Heavy Expects First Europe Reactor Sale
Jan. 25 (Bloomberg) -- Mitsubishi Heavy Industries Ltd., which has developed the world’s biggest atomic reactor, expects to win its first nuclear power plant order in Europe next year, challenging Areva SA in its own backyard.
Japan’s largest heavy machinery maker anticipates a “high possibility” of a utility in northern Europe selecting its new 1,700-megawatt model that comes with advanced fault detection technology, Akira Sawa, head of the company’s atomic business, said in an interview. The U.K. and Switzerland have also sought atomic plant proposals from Mitsubishi Heavy, he said.
“We should be able to expand smoothly into other European countries after Northern European governments, which impose tough regulations, sign off on our product,” Sawa, 61, said Jan. 19 in Tokyo. He declined to name the company or country Mitsubishi expects to win the order from.
Teollisuuden Voima Oyj, the Finnish utility known as TVO, said it shortlisted Mitsubishi Heavy’s EU-APWR model along with reactors from Areva, Toshiba Corp., GE Hitachi Nuclear Energy and Korea Hydro & Nuclear Power Co. Asian suppliers are making competition tougher for France’s Areva, the world’s biggest reactor builder, which lost a $20 billion contract in the United Arab Emirates last month to a group led by Korea Electric Power Corp.
“A European deal would be a big step for Mitsubishi as it expands its reactor business globally,” said Eiji Tomaru, an analyst at Mizuho Investors Securities Co. in Tokyo.
U.S. Talks
Mitsubishi Heavy agreed in July last year to hold talks with Luminant of the U.S. to supply two 1,700-megawatt APWR reactors to a plant near Dallas, aiming to clinch its first U.S. reactor sale.
In Japan, the company has built 24 atomic power plants including a 912-megawatt reactor for Hokkaido Electric Power Co, which started operating last month.
Mitsubishi Heavy has lost 14 percent in six months on the Tokyo Stock Exchange compared with a 0.44 percent gain in the benchmark Topix index. The stock fell 2.1 percent to 326 yen at the morning trading break.
Finnish Utilities
TVO, Fortum Oyj, Finland’s biggest utility, and the E.ON AG-led Fennovoima Oy venture are competing for a permit to build a sixth atomic generator in the country. The government has said it may decide on adding a reactor by March.
The Olkiluoto power station operated by TVO currently has two reactors. The utility is building a third and plans to add a fourth unit, for which it has shortlisted Mitsubishi. Fortum’s Loviisa station has two reactors, while Fennovoima has none and proposes to build one plant.
TVO may start construction of its proposed fourth reactor by 2014, Anneli Nikula, adviser to TVO, said in a Jan. 21 telephone interview.
Mitsubishi Heavy hasn’t been shortlisted by Fortum, which is considering models by Areva, GE Hitachi, Toshiba, Korea Hydro and Atomstroyexport ZAO.
“The Mitsubishi reactor isn’t one of our options,” Sasu Valkamo, who heads Fortum’s new reactor project, said by telephone on Jan. 21. “That was decided before we filed our permit application.”
Terrorist Threat
Fennovoima is considering Areva and Toshiba plants, said Juhani Hyvaerinen, the company’s executive vice president for nuclear engineering. These were “at the time more adapted to the Finnish specifications,” he said. “Fennovoima’s list is very short and many good reactors were left out.”
The threat of terrorist attacks, coupled with the legacy of nuclear accidents at Three Mile Island in 1979 and Chernobyl in 1986, mean a revival in atomic power is accompanied by increased demands for safety. Mitsubishi Heavy, Areva and Toshiba are among companies that make plants capable of withstanding impact by an aircraft.
Sawa said Mitsubishi Heavy’s EU-APWR is equipped with a digital control panel that would alert workers to mechanical faults faster than conventional analogue gauges, thereby reducing the risk of accidents.
“These attempts to provide safer reactors are a response both to terrorist events such as 9/11, which have made the possibilities of unlikely events all the more real alongside public concerns about the health effects of radiation after a catastrophic accident,” said Daniel Aldrich, a political science assistant professor at Purdue University in Indiana.
A partial meltdown at the Three Mile Island plant in Pennsylvania was the biggest nuclear accident in the U.S. On April 26, 1986, the No. 4 reactor at the Chernobyl nuclear plant exploded in Ukraine, leaking radiation into the atmosphere. Winds carried the fallout across Europe to Germany.
