Areva launches at Newport News

The world's largest reactor maker says it will build at least seven new plants in the U.S.

Areva announced this week that in partnership with Northrop Grumman Corp. (NYSE:NOC) it will build a $360 million nuclear reactor components plant in Newport News, VA adjacent to a major shipyard. Reuters reported the joint venture will be called Areva Newport News LLC. (press release)(Q&A)

Tom Christopher, CEO of Areva's U.S. operations, said the facility will break ground in 2009 and production will develop over the next three years. Areva's global CEO Anne Lauvergeon said the company intends to gain a third of the total world market share for nuclear reactors and that the Newport News plant is a key step. Areva will hold a 67% stake in the project and the other third will be held by Northrop-Grumman.

The new facility is expected to employ at least 500 workers. This is the first full-scale heavy manufacturing facility to produce components weighing more than 500 tons for the U.S. commercial nuclear industry. Lehigh Heavy Forge Corp., based on Bethlehem, PA, will also make large steel pieces for the Newport News plant.

Supply chain links up

The construction of heavy forgings and other large components for new nuclear power plants is a major step in the revivial of the supply chain for the industry in the U.S. The announcement by Areva is a very significant step in the commitment of the nuclear energy industry to build new plants in the U.S.

Even the normally taciturn New York Times noted that the new plant for key reactor components is a signal that nuclear power plants are ready to be built again. Perhaps it was the statement by CEO Lauvergeon who told the NYT, "We have a long term vision."The NYT also reported that BWX Technologies, a subsidiary of McDermott Intl, is setting up a plant in Mount Vernon, Indiana, to manufacture reactor vessels.

River access for shipments a key factor

Northrop-Grumman has built U.S. Navy nuclear aircraft carriers including the USS Enterprise which is powered by eight nuclear reactors. It will use its shipyard facilities to load 600 ton nuclear reactor components on barges for delivery via the James River saving millions in costs.

The factory will make parts for Areva's U.S. design of the Evolutionary Power Reactor (EPR). Two nuclear power plants based on the European design are under construction - one in Finland at Oikiluoto and the other in France at Flamanville. The U.S. design for Areva's EPR is currently under review for certification by the NRC. (graphic BBC)

Working with Unistar, a U.S. consortium, Areva has plans to build new nuclear plants at multiple locations in this country. Sites include Calvert Cliffs in Maryland, Nine Mile in New York, Blue Bell in Pennsylvania, and Ameren in Missouri.

If those companies go forward with the new reactors, the first unit could enter service in 2015 at Constellation's Calvert Cliffs site in Maryland, followed by the others in 2016 and 2017.

Granting of federal loan guarantees will be a key success factor in building the Unistar Plants. In all U.S. nuclear utilities have applied for a total of $122 billion in guarantees. Congress will likely address the current inadequate ceiling of $18 billion when it convenes in 2009.

Second big lift for nuclear energy in two months

The announcement by Areva follows one just two months ago by Westinghouse which is building a similar facility in Lake Charles, Louisiana with the Shaw Group. There Global Modular Solutions LLC will produce equipment components for the AP1000 reactor. The facility is expected to employ up to 1,400 people when it achieves full operation. Initial production is expected to begin by the end of 2009.

J. Bernhard, chair, president and CEO of Shaw, said: "After an extensive search of potential sites, the Port of Lake Charles was chosen because of its deep water access, its proximity to other important modes of transportation and the availability of a skilled workforce."

The Westinghouse AP1000 reactor has been referenced for 14 news units in license applications to the NRC including two each at the following locations.

• Harris
• William Lee
• Turkey Point
• Levy County
• V.C. Summer
• Vogtle
• Bellefonte

Westinghouse also has orders on hand to build four AP1000 reactors in China, two each at two locations.

Some of the components for those units will come from Doosan Heavy Industries in Korea. (graphic BBC)

# # #