November 29, 2016 7:30 pm JST
Interview

Toshiba aims to nail down multiple nuclear orders in China, India

Group's energy boss also sees opportunities in US under 'supportive' Trump

TOKYO -- Toshiba's Energy Systems & Solutions unit aspires to win multiple orders for its latest AP1000 nuclear reactor in China and India, according to Danny Roderick, the president and CEO of the operations. And Roderick sounds confident that U.S. President-elect Donald Trump will help create a more hospitable environment for energy companies in general.

"I think Mr. Trump is much more supportive of thermal energy, and he has shown support for nuclear energy," Roderick said in an interview with The Nikkei last Friday. "I think that's probably the single biggest policy difference [from President Barack Obama]."

Roderick, who doubles as chairman of Westinghouse Electric -- Toshiba's U.S. nuclear subsidiary -- suggested the group will seek to replace aging American nuclear power plants. He said the group can leverage its various models, including boiling water reactors from Toshiba.

But it is China that Roderick described as "the most important thing for us right now."

Westinghouse has already received orders for four AP1000 pressurized water reactors there. "Different utilities have around 30 units that are already sited for the AP1000," he said.

Roderick sees China's nuclear market growing further, with 180 to 200 reactors expected to be built eventually. Toshiba and Westinghouse, he added, would account for around 30-40% market share in China.

"I still see us very much in the running ... to get up near 50 units over the next 15 to 20 years in China," Roderick said.

As for India, he expects the country's deal with Japan on peaceful nuclear cooperation to provide a tailwind. 

Westinghouse has landed a deal to build six reactors, and Roderick said the parties "are in the very final parts" of the discussion on finalizing the contracts.

"We will have the contract to go forward for the final EPC (Engineering, Procurement, and Construction) agreement before the end of 2017."

He said the company is likely to receive orders from India for an additional six reactors, adding, "I think overall we're very excited about the opportunity in India."

Still, the outlook for the global nuclear market is anything but certain.

Challenging times

The International Atomic Energy Agency forecasts demand for around 150 new reactors, each with a capacity of 1 gigawatt, by 2030. But outside of China, construction has been slow to get going. The Vietnamese government recently shelved a plan to build nuclear plants in the southern part of the country, citing financial difficulties. 

Toshiba's nuclear power business, which has focused on supplying BWRs -- the type used at the tsunami-hit Fukushima Daiichi plant in northeastern Japan -- has its own financial problems.

Its Keihin Product Operations, the only plant in Japan that manufactures turbines for power generators, shipped one overseas last Thursday but does not have any more parts for new ones. "Domestic shipments declined following the nuclear disaster in Fukushima Prefecture," an official at the facility explained, "though we always had requests for international shipments."

Toshiba, Hitachi, and Mitsubishi Heavy Industries have entered talks to integrate their nuclear fuel businesses, hoping to keep the operations afloat at a time when most of Japan's nuclear reactors remain offline due to safety concerns. 

Still, Roderick believes demand for nuclear reactors is far from drying up. He said that as older plants come up for replacement, "I believe we can educate people about the new technologies, that they will see how we'd address many concerns they have over those 50-year-old, 60-year-old plants." This, he suggested, will encourage migration to the latest systems.

"I do believe, in the long run, that it'll be necessary to build a significant number of new units."

While staying in the nuclear game, Toshiba aims to prop up its revenue by promoting thermal and renewable power plants.

(Nikkei)

 

Toshiba Corp.

Japan

Market(Ticker): TKS(6502)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 12,234.40M
Shares: 4,237.60M

Hitachi Ltd.

Japan

Market(Ticker): TKS(6501)
Sector:
Industry:
Producer Manufacturing
Industrial Conglomerates
Market cap(USD): 29,040.20M
Shares: 4,833.46M

Mitsubishi Heavy Industries, Ltd.

Japan

Market(Ticker): TKS(7011)
Sector:
Industry:
Producer Manufacturing
Industrial Machinery
Market cap(USD): 13,187.35M
Shares: 3,373.64M

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