Areva, Northrop Grumman To Restore U.S. Reactor Production Capacity

Defense Daily, Oct 24, 2008

By Jeff Beattie

In a major step forward for the rebirth of the North American nuclear power market, Areva and Northrop Grumman [NOC] said yesterday they will build a new $336 million facility in Newport News, Va., to manufacture large components- -such as steam generators and reactor vessels--for Areva-designed nuclear plants that the French company hopes to deploy in Canada and the United States.

The plant would be the only facility in the United States capable of manufacturing such huge reactor components, complementing a limited number of plants in Asia and a large facility in France, also owned by Areva.

The announcement is huge news for the nuclear industry, whose officials for years have pointed to limited forging and manufacturing capacity worldwide as a possible bottleneck to construction of new nuclear power plants now being considered or undertaken for the first time in decades by utilities on several continents.

"The fact that [Areva and Northrop Grumman] are willing to make such a large investment at this time is further evidence that the nuclear renaissance in the United States is real," Sen. Pete Domenici (R-N.M.), a strong supporter of the U.S. nuclear sector, said in a written statement yesterday.

The new manufacturing plant also provides strategic benefits for Areva, which is majority-owned by the French government, as it tussles with U.S.-based reactor vendors for business in North America.

In partnership with Baltimore-based Constellation Energy Group and Electricite de France (EDF), Areva is marketing its so-called Evolutionary Power Reactor (EPR) to U.S. and Canadian utilities.

Areva has sought to stress its U.S. investments and partnerships to counter the idea it is taking business away from U.S. reactor vendors--General Electric [GE] and Pittsburgh-based Westinghouse, which actually is owned by Japan's Toshiba Corp.

The new facility also allows Areva to tout the creation of 500 skilled jobs at the planned Newport News, Va., Facility--at time of rising unemployment in the United States. And Areva can argue that an even larger portion of each reactor it sells in the United States is built here.

"Areva Newport News is powerful evidence of the reality of the U.S. nuclear energy resurgence and our commitment to it," Areva Chief Executive Officer Anne Lauvergeon said in a written statement Thursday.

"Areva Newport News is a key step in our dual strategy to increase domestic content in the new nuclear power plants we build and to produce in the local currency...[and] together with our Chalon/St. Marcel [reactor manufacturing] plant in France, AREVA strengthens its capabilities to supply the global energy renaissance."

Areva officials suggest their manufacturing expansion into the United States will not hurt their other plants because their heavy-component plant at Chalon/St. Marel is currently running at full capacity.

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