Europe: Power Play

A benign nuclear war is being fought in Europe — a battle over the $500 million-a-year market for power reactors.Western Europe has already outdistanced the U.S. in the number of nuclear power installations (29 v. 12), but that is just the beginning. Europe has decided for the future to invest more in nuclear power than in any other means of producing electricity, is on the threshold of making major purchases of equipment. Such U.S. giants as General Electric and Westinghouse, which won an early beachhead for their reactors, are now being strongly challenged by big equipment makers in Britain, Germany, France and Sweden, which claim that their reactors are more economical and efficient than the U.S. models.

Signs of Rise. Britain alone produces more nuclear power than the rest of the world’s nations combined. Its power reactors generate 7% of the island’s electricity, and other plants now being built or planned will raise that figure to 12% within three years. The Common Market’s Six get only 1.5% of their power from the atom, but that output will be trebled by plants now abuilding. France, the Continent’s biggest investor in atomic power, intends to increase its generating capacity as much as tenfold by 1970. The Market’s nuclear authority, Euratom, predicts that by 1980 the Six will be producing 280 billion kilowatt-hours of nuclear power, or 70% as much as they now get from all power sources.

Plants are rising because costs are coming down. A combination of improved reactors and lower-cost uranium has not only made nuclear power competitive with conventional power but made it the cheapest of all available forms of electricity in many parts of Europe. German power experts calculate that a large modern nuclear plant can churn up power for 6 to 61 mills per kilowatt-hour v. 71 to 9 mills for an equivalent coal plant. Hydroelectric power is cheaper than both, but is not widely available. Switzerland and Sweden are opting for nuclear power because they are running out of water sources.

Communist Customers. To win contracts, companies and governments are making some imaginative deals. France is negotiating to sell a $118 million reactor to Spain, has offered to pay a quarter of the cost of it, and in return will get a quarter of the power that it produces. Westinghouse invaded heavily protected French territory, got the job of building the reactor for a Franco-Belgian plant in the Ardennes by promising to subcontract much of the work to local firms. In order to profit from the German market, Westinghouse has also licensed Siemens to use its reactor patents; G.E. has closed a similar deal with Germany’s A.E.G.

In a few months, U.S., British and Continental firms will bid for two plants to be built in Belgium and one in Italy, each of which will cost upwards of $100 million. A.E.G. and Siemens are grimly competing for a $60 million plant in southern Germany, and directly across the Rhine in Switzerland Westinghouse and G.E. are fighting over an interconnecting plant. Another fascinating market lies east of the Iron Curtain. West ern nations are now in the mood to consider bids from the satellites—provided that they agree to let inspectors check regularly that the atoms are used only for peaceful power. This could be difficult, because one inevitable by-product of the reactors is plutonium, which is a major ingredient in nuclear bombs.

Pride & Monopoly. The U.S. is well ahead in the marketing race, but the contest is bound to narrow. To boost national pride and to save foreign exchange, many of Europe’s state-owned power monopolies are expected to place most of their future orders with local suppliers. U.S. equipment companies believe that their most promising markets are in countries that want nuclear power but have not yet begun large-scale production of reactors themselves, notably Italy, Spain, Switzerland and Japan. Beyond that is a vast future market in the developing countries. Eagerly eying South America and Africa, the Western suppliers figure that eventually there should be enough business for just about everyone.