Wednesday, April 9, 2008

GE-Hitachi pulls out of Ontario bidding

Company still has a long-term relationship with AECL

The Toronto Star reports that GE-Hitachi Nuclear Energy told the Ontario government it will not bid on construction of a new nuclear power plant in the province. There are still a lot of decisions to be made. It isn't over until the fat lady sings.

The decision shortens the list of qualified bidders to three - Atomic Energy of Canada Ltd., France's Areva, and Westinghouse Electric. Co. which is owned by Toshiba. It could also affect bidding for a potential new reactor in New Brunswick province.

"GE-Hitachi Nuclear Energy has made a business decision to withdraw," Infrastructure Ontario, the agency overseeing the bidding process, said in a statement. GE-Hitachi, it said, decided to focus on existing customers and work toward certifying its boiling-water reactor design (ESBWR) with the U.S. Nuclear Regulatory Commission.

The Toronto Star reports that experts it interviewed say the company was in a difficult position and initially was caught off guard by the invitation to bid. Its Canadian operation is part of "Team Candu," the consortium of five power-industry companies including AECL that support construction of next-generation Candu reactors in Ontario.

Peter Mason, president and chief executive of GE-Hitachi Nuclear Energy Canada, told the Toronto Star last month that the Canadian operation, as a supplier of uranium fuel fabrication for Candu reactors, remained committed to Atomic Energy's reactor design which is the new ACR-1000.

Marc Kealey, a former general manager at AECL, told the newspaper GE-Hitachi probably felt its two other rivals - Westinghouse and Areva - also had a better chance at getting the contract.

* * *

The Ontario provincial government said it continues to hold confidential meetings with AECL, Areva and Westinghouse until April 25. The firms are expected to submit a formal proposal by May 9 as part of the first phase of bidding.

The government plans to pick a winning technology by the end of 2008. It also will decide by that time whether the plant will be located in Clarington or Bruce County, and whether the plant's operator will be Ontario Power Generation or Bruce Power.

Stay tuned. This is a potentially big deal for the U.S. At the rate fossil fuel prices are climbing, New England states could be clamoring for electricity from Ontario's new nuclear build in the not too distant future.

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