China and France Build Nuclear Reactors
November 30, 2007 | BY
clpstaff &clp articlesAreva SA, a French state-owned nuclear engineering company, has signed a US$11.9 billion commercial-power contract with China Guangdong Nuclear Power Group…
Areva SA, a French state-owned nuclear engineering company, has signed a US$11.9 billion commercial-power contract with China Guangdong Nuclear Power Group [CGNPG] on Monday, November 26 2007. Under the contract, Areva will take part in building two EPR nuclear reactors in a southern province in the PRC and will provide necessary support and services to operate them.
The two reactors will be the third and fourth EPR to be built by Areva SA in the world after Finland and France. Apart from designing and manufacturing nuclear power and high-voltage reactors, Areva also has enrichment plants to make nuclear fuels and mining businesses that extract uranium in Niger and Canada. The French nuclear engineering company has offices and sites in many provinces in the PRC, with its head office stationed in Beijing.
While Areva specializes in nuclear engineering, CGNPG owns several nuclear power stations. The Chinese company is also involved in the development of clean energy such as wind power and hydropower.
The deal signed by both companies indicated China's determination to become self-sufficient in advanced nuclear technology. As the country has been criticized for its record on pollution, and with growing concerns over limited resources, nuclear power has gained support in the PRC.
The deal was the largest international commercial contract ever won by the French nuclear industry, and it will allow installation of capacity reaching 40 gigawatts by 2020, or 4% of the PRC's total power-generating capacity, according to the Wall Street Journal.
"The energy and natural resources sectors are strategic for China at the moment asChina is willing to reduce its dependence on other countries in these areas. The development of a national nuclear power industry is part of a long term strategy which is aimed atensuring that China mayrely on its own resources and, accordingly, gain more autonomy and more capacity to face its increasing energy needs." said Gide Loyrette Nouel's partner Stéphane Vernay. The deal is not a one-time project, he said, but rather "a long term cooperation project between the Chinese and French nuclear industrieswhich is likely to last for several decades."
There are concerns that if the PRC tried to sell nuclear reactors that resemble those of Areva too closely, the country might be violating intellectual property rights. In response to this issue, Vernay said that the IP rights protection is ensured in the relevant contractual documents and also, protected under Chinese and international law. So far, no IP rights issues have been identified and it is unlikely that such issues may arise as all parties have common interest in protecting their IP rights.
Gide Loyrette Noel advised Areva SA on the nuclear technology deal.
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