GE and Hitachi form nuclear energy unit
September 11th, 2007NEW YORK: General Electric and Hitachi have announced 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 Monday 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 were 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 in the 1970s as safety worries mounted. And nuclear energy could become more attractive in the United States if the U.S. 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, Andy White, chief executive of GE Energy Nuclear, said.
Except for Japan, the business that will operate 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,” Masaharu Hanyu, president of Hitachi-GE Nuclear Energy, said.
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 Hitachis strengths are in manufacturing reactor components and construction methods, White said.
GE officials said polls show public support for construction of nuclear plants, though Jeffrey Immelt, chief executive of General Electric, cautioned that broad acceptance of nuclear energy may take time.
“Weve been in this business for 50 years. Were not naĞ¿ve about how this changes over time,” he said. “I would say its hard to believe simultaneously in energy security and reduction in greenhouse gases” without nuclear power. “Its just intellectually dishonest.”
The United States 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.

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