April 2010
FOR IMMEDIATE RELEASE

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VALVE WORLD EXPO 2010 SPECIALIST ARTICLE NO. 3:

The comeback of nuclear power

Valve makers set to profit from the revival of nuclear energy

Nuclear energy never really managed to be quite the breakthrough in the energy market politicians thought it would be. Italy backed out entirely and Germany began phasing-out from nuclear power. Things, however, are visibly changing. In the atomic power plant construction business, the largest growth for decades is evident, creating a lucrative challenge for the valve and gasket industry.

After the accident at the Chernobyl plant in 1986, the peaceful use of atomic energy decreased noticeably. The catastrophe 24 years ago in the former Soviet Republic increased doubts concerning the controllability of nuclear energy.

Atomic energy became an important topic again when countries such as India and China began to strive for economic prosperity and after climate debates at UN conferences led to the Kyoto Protocol. Both debates and protocol called for reducing CO2 emissions to stop global warming. Not all countries wanted to rely on regenerative sources such as wind, solar, geothermal or water energy alone.

Results of the CO2 debate

Following the results from the CO2 debate, nuclear energy was among the winners, as a large amount of experts viewed it as a source of energy free from CO2 emissions. At the end of 2008, approximately 440 nuclear plants in 31 countries were in operation. Currently, 42 plants are being constructed in 14 countries. According to the German Atomic Forum, 68 new plants were being planned in 2008. China wants to construct 16 new plants, Japan 11 and the U.S., which already is the world leader with 100 nuclear reactors, has plans for 15 more in the next few years.

Nuclear power accounted for 14% of worldwide energy at the beginning of 2008. In the European Union the share was approximately 30%. These figures will increase in the next few years, considering power plants are currently either being built or planned. “In Europe a strong trend is visible for an increased use of nuclear energy,” states Axel Moocher, Managing Partner of Schroeder Valves GmbH & Co. KG.

New energy mix in Great Britain

Great Britain is a good example. The country is aiming at a new energy mix, including atomic power. “We have to view all alternatives to CO2 emissions in view of the challenges climate change poses,” declares Ed Millerand, British Secretary of State for Energy and Climate Change. “Nuclear power is an alternative, which in my view is safe.” Tory and Labour politicians both agree on how to supply energy in the future.

In Great Britain, the share of nuclear energy is set to grow from 15% to at least 25% in the next twenty years. Climate change is not the only factor behind the revival – Great Britain's oil fields in the North Sea are drying up. “If something doesn't happen soon,” says Greg Clark, the Tory's energy-policy expert, “Great Britain is in danger of having its lights go off around the year 2017.” The government is reacting fast. Procedures for approval and permission for new nuclear power plants have been expedited in order to help and the aim is to construct ten new plants in the next ten years.

Comeback in Italy

Nuclear power is also facing a comeback in Italy after the country switched off its four power plants following a national referendum. President Silvia Berlusconi wants a return to nuclear energy with a new plant, which is supposed to be constructed 30 km away from Venice. Construction is set to begin in 2013. The reactor will be in operation by 2020. Italy plans to be more independent from energy imports.

The company Vattenfall is investing billions in expanding existing reactors in Forsmark and Ringhals, both located in Sweden. In Switzerland, nuclear power plants are set to be upgraded and overhauled. France, which has the largest amount of nuclear power plants in Europe, is currently building a reactor in Flamanville. Finland and Lithuania plan to build more plants – Poland wants to enter the market.

The Russian government meanwhile decided to build a Baltic nuclear reactor in the Kaliningrad region. Two reactors will produce 2300 MW. The first reactor will be built between 2010 and 2016; the second reactor will be constructed between 2012 and 2018.

The development of the German nuclear energy market is not very clear, since the former government's agreement to withdraw from producing nuclear energy is still a consensus. The new government however is thinking about extending the periods in which reactors are allowed to operate. Until now, the core business has been limited to maintenance and repair. It is apparent that higher maintenance investments in existing plants are being thought of. Increasing demand in the market is a clear sign of this.

Gold rush atmosphere

Energy and valve companies want to utilize the gold rush atmosphere for atomic energy. The German energy corporation RWE already has projects underway in Romania and Great Britain. RWE is cooperating with five other European companies at the Cernavoda plant in Romania with the aim to build and operate blocks 3 and 4 of the reactor, based on Canada's Candu technology. These are highly efficient heavy water reactors which are already in use in 40 plants worldwide. In the next six years, two new reactors will be built on site at the Cernavoda nuclear plant for Euro 4 billion.

With a Turkish partner, Russian companies will build four blocks in Akkuyu, situated 350 kilometres east of Antalya. The plant will cost Euro 15.5 billion and could be finished by 2020. With the help of Russia, Turkey will fulfil the dream of having its own nuclear reactor.

Schroeder Valves delivers valves for the power plants Flamanville in France and Ringhals and Oskarshamn in Sweden, as well as for Borssele in the Netherlands. Velan, which is headquartered in Montreal, will supply the Slovakian atomic plant Mochovce with shut-off valves. The shut-off valves are intended to be used for the main steam pipe and the water supply. Slovenske Elektrarne is planning to start the third unit in autumn 2012; the fourth will follow eight months later. The U.S. corporation Swagelok has secured deals for plants in Asia, Europe and North America.

Highly regulated industry

The valve market for atomic power plants has its own laws. “Suppliers constantly have to interpret norms, customer specifications and regional rules,” explains the company Swagelok. Among other products, the company with more than 4,000 employees worldwide, manufacturers valves for nuclear power plants.

Forward-thinking maintenance and repair are therefore most important. Damage through corrosion, aging, fatigue and wearing have to be considered. High demands also require highly qualified, technical employees. As Swagelok knows, these are hard to find in the field of nuclear energy. To a certain extent, the industry complains of a lack of qualified workers. But the lack of workers has no effect on increasing demand for new atomic power plants.

Clear messages are being sent from the Asian market. "A strong interest was noticeable," stated German company Schroeder Valves in regards to the first Indian nuclear trade fair, which took place in Mumbai last year. There are proposals for around 25 new plants in India.

China is the largest market

China is considered the largest market for nuclear energy. The country is planning to build 60 nuclear power plants in the next twelve years, which have to be equipped with pumps and fittings. “All large-sized plant-engineering companies are competing for orders in that market,” states Schroeder Valves. AREVA and Westinghouse have already received orders. Schroeder Valves has received an order for the Yanjiang energy plant and expects further orders in 2010 for future atomic power plants.

Germany's KSB AG has successfully entered the Chinese market. A joint venture called SEC-KSB Nuclear Pumps & Valves Co. Ltd was founded especially for China. KSB will supply 16 main boiler feed and coolant pumps for two new power plant units on the South Chinese island of Hainan in a deal worth approximately Euro 50 million. KSB is building a 28,000 square meter large production facility near Shanghai. Starting end of 2010, the facility will initially produce pumps and will later manufacture and test fittings for Chinas nuclear reactors. Weir Power & Industrial also landed a contract in China. The British company will ship triple offset flow control valves for the new units in Sanmen and Haiyang.

Hoping for economic growth

Other Asian countries also hope atomic energy will fuel their economic advancement. Thailand, for example, wants to build its first nuclear power plant and is relying on help from China. The country's Electricity Generating Authority signed a contract for nuclear technology with China Guangdong Nuclear Power Group and the CLP Holding Co. The three parties will share knowledge over the course of three years.

Regarding climate change, Japan is speeding things up in its nuclear market. Five companies are in charge of supporting the Japanese nuclear energy industry with new products. Japan's government is providing financial support for research of nuclear technology. Okano Valve Co. is assigned with developing special steam safety valves. Even Africa, which as of yet hardly has any nuclear power plants, wants to build more. Ten new power plants are being considered for South Africa.

One of the most profitable markets is the U.S. The U.S. has the largest amount of atomic power plants and is set to build more. The superpower is not only going to expand its number of plants to nearly 120 in the next 15 years, but will also extend service life. More than half of the power plants have had their service life extended by 20 years, to 60 years. Flowserve Corp. was able to get a major order worth over $ 45 million from Westinghouse Electric Co. for plants in the U.S. The deal covers safety valves as well as check and ball valves.

Unusual ideas

A lot of projects can be expected for the future, even if some plans are right now just unusual ideas. The Russian power company Inter Rao Ues is evaluating if electricity from Russian nuclear plants can be exported to Germany via a cable running through the Baltic Sea. If ever realized, the cable would run from Kaliningrad in Russia alongside the future North Stream gas pipeline and would have a capacity of 600 to 1.000 megawatt. The company wants to negotiate with Germany, Lithuania and Estonia about the project.

Whatever path the energy market may take, it seems certain that it is leading to a broadly diversified energy mix, including oil, regenerative sources, gas – and, in a lot of cases, atomic energy.

Valve World Expo, 7th Biennial Valve World Conference & Exhibition, will be the perfect international platform for manufacturers and buyers of valves and gaskets used in the nuclear power plant industry. Over 400 exhibitors from around the world will present their innovations. Valve World Expo will be held from November 30 – December 2, 2010 at the fairgrounds in Düsseldorf, Germany. For further information on visiting or exhibiting at Valve World Expo 2010, contact Messe Düsseldorf North America, 150 North Michigan Avenue, Suite 2920, Chicago, IL 60601. Telephone: (312) 781-5180; Fax: (312) 781-5188; E-mail: info@mdna.com; Visit our web site http://www.mdna.com; Subscribe to our blog http://blog.mdna.com; Follow us on twitter at http://twitter.com/mdnachicago

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