Submitted by EnergyTechStocks.com
It’s time to hand out the first set of report card grades for six of the world’s leading nuclear reactor makers. Serving as “professor” is Bruce Lacy, head of Lacy Consulting Group in Cedar Rapids, IA, a 27-year nuclear industry veteran who closely follows the financial side of commercial nuclear power. Lacy was a tough grader. He handed out just one A, one B, and three C’s, plus one incomplete. Let’s begin.
Toshiba/Westinghouse – Japanese giant Toshiba Corp. and its Westinghouse Electric Co. unit got the only “A” in the class. According to Prof. Lacy, Toshiba/Westinghouse has more “credible players” interested in its design than anyone else. Also, it has an edge in the licensing process because its design will require only an amendment from the U.S. Nuclear Regulatory Commission, not a full license. In addition, because the potential owner-operators interested in its design are concentrated in the U.S. Southeast, where power generation is regulated, Lacy said the company has more assurance that it will be able to recover its investment. Another factor in favor of Toshiba/Westinghouse is that the company also has licensing rights to an earlier design done with General Electric Co. Thus it may make money building both pressurized and boiling water nuclear reactors, Lacy said.
General Electric/Hitachi – Even though Lacy gave these affiliated giants an “A+” for reactor design, their final grade was only a “C.” “When it comes to actual sales,” Lacy explained, “they’re not doing too well. They have only three heavy-duty firms looking at their design, only two of which are looking at licenses.” Lacy wondered aloud about what the problem might be, noting that GE/Hitachi representatives don’t always attend the conferences their competitors attend. He said this may raise questions in prospective buyers’ minds about how strongly GE/Hitachi stands behind its product. Lacy said he would have loved to given a higher grade, but couldn’t.
Areva – French nuclear giant Areva SA, the world’s biggest maker of nuclear reactors, got a “B” from Lacy, although “They’re lucky they didn’t get a C,” he said. Areva’s biggest problem in Lacy’s opinion is that the company has been having problems with a plant it is building in Finland. According to Lacy, the plant is behind schedule and over budget. “They’re screwing up the construction and that has everyone worried,” he said, adding that Areva made the situation worse last fall when it essentially denied it was having problems at an international nuclear conference in London. Despite these problems, Lacy said Areva is doing well in fashioning attractive marketing and financial packages for would-be buyers, which has led to it entering into a number of potentially lucrative partnerships with outfits like Constellation Energy.