[NukeNet] GE, Hitachi Form Nuclear Alliance

[Bill Smirnow]

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http://www.nytimes.com/aponline/business/AP-GE-Hitachi-Nuclear.html?_r=1&oref=slogin
     GE, Hitachi Form Nuclear Alliance
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By THE ASSOCIATED PRESS
Published: July 9, 2007
Filed at 7:49 p.m. ET

NEW YORK (AP) -- General Electric Co. and Hitachi Ltd. on Monday launched a
joint nuclear business to capitalize on rising demand for electricity and
increasing concerns about carbon dioxide emissions from coal-fired plants.

John Krenicki, president and chief executive of GE Energy, said at a news
conference that nuclear plants produce virtually no carbon gases and
reactors can take the place of aging power plants that rely on fossil fuels.

''We believe nuclear is going to step in and we're getting ready to execute
that plan,'' he said.

Customers seeking fuel diversity to avoid relying on oil and coal are
helping to rebuild a market for nuclear energy that faltered beginning in
1970s as safety worries mounted. And nuclear energy could become more
attractive if Congress and state legislatures eventually impose a carbon tax
to discourage carbon-producing plants, Krenicki said.

The GE-Hitachi alliance plans to spend between $350 million and $400 million
for nuclear plant designs and certification. The designs, which have been in
the works for about 11 years, are expected to be completed by 2010, said
Andy White, chief executive of GE Energy Nuclear.

Except for in Japan, the business that will operate internationally is 60
percent owned by GE and 40 percent by Hitachi.

In Japan, the business will be about 80 percent owned by Hitachi and
approximately 20 percent by GE.

GE and Hitachi, which agreed last November to establish the venture, say
they are combining their nuclear businesses to provide advanced boiling
water reactor plants and related services. To avoid ceding business to
competitors, the two companies also will offer equipment and services for a
separate nuclear plant technology known as pressurized water reactors.

''We are coming together at the right time, at the right place and in the
right circumstances,'' said Masaharu Hanyu, president of Hitachi-GE Nuclear
Energy.

The two companies have worked together since the 1980s to develop reactors
in Asia. GE brings to the partnership its expertise in designing boiling
water reactor plants and Hitachi's strengths are in manufacturing reactor
components and construction methods, White said.

GE officials said polls show public support for construction of nuclear
plants, though Chief Executive Jeffrey Immelt cautioned that broad
acceptance of nuclear energy may take time.

''We've been in this business for 50 years. We're not naive about how this
changes over time,'' he said. ''I would say it's hard to believe
simultaneously in energy security and reduction in greenhouse gases without
... nuclear power. It's just intellectually dishonest.''

About 100 nuclear power plants operate in the United States, but an order
has not been placed for a new reactor since 1973, six years before an
accident at the Three Mile Island plant in Pennsylvania and opposition to
nuclear power by environmental activists who said the plants were unsafe.

White said technological advances, such as digital control systems and
computer designs of nuclear plants, have been applied to several generations
of nuclear plants in the past 30 years, improved their safety and security.

The United States now gets about 20 percent of its electricity from nuclear
reactors.

Construction of plants in the GE-Hitachi deal will be slow because of the
time required for design, licensing and approval of nuclear plants.

White said GE-Hitachi is hoping to get two or three orders a year in the
United States and one or two overseas. The first plants are expected to come
on line in 2015 or later, he said.

The world's nuclear power giants are counting on growing demand not only in
the United States but also in China, where the power market is expected to
grow significantly. Immelt said India also can provide a strong market for
nuclear power.

In 2005, President Bush signed an energy bill that provides incentives to
build new nuclear power plants in the U.S.

GE shares rose 14 cents to $38.62 Monday.
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