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Viewing cable 05OTTAWA402, CANADA LOOKS TO CHINA FOR NUCLEAR REACTOR SALES

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Reference ID Created Released Classification Origin
05OTTAWA402 2005-02-09 19:05 2011-04-28 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Ottawa
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 OTTAWA 000402 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CAN, EB/ESC/IED, AND EB/EPPD 
NRC FOR INTERNATIONAL PROGRAMS: ROSALES-BUSH 
DOE FOR IA: PUMPHREY, DEVITO, DEUTSCH 
STATE PASS USTR: CHANDLER 
 
E.O. 12958: N/A 
TAGS: ENRG TRGY CA CH AECL
SUBJECT: CANADA LOOKS TO CHINA FOR NUCLEAR REACTOR SALES 
 
REF: A. CALGARY 067 
     B. OTTAWA 382 
     C. VANCOUVER 161 
     D. OTTAWA 228 
 
1.  (U) Sensitive but unclassified.  Not for distribution 
outside USG channels. 
 
2.  (SBU) Summary:  Along with interest in joint development 
of petroleum and mineral resources (reftels), Canada and 
China have also pledged to deepen their ties in nuclear 
energy.  During Prime Minister Martin's January visit to 
China, the two governments promised to expand commercial 
partnerships in nuclear energy and to jointly develop 
advanced nuclear technologies.  A reinvigorated relationship 
with China would be a welcome tonic for Canada's 
government-owned nuclear technology company, Atomic Energy of 
Canada Limited (AECL).  End summary. 
 
3.  (SBU)  AECL exclusively designs and markets Canadian 
nuclear energy technology, and has built reactors for 
customers in Canada, South America, Eastern Europe and Asia. 
Although wholly owned by the Government of Canada, AECL 
operates independently, and a non-government Board of 
Directors oversees its operations.  The company has recently 
suffered a series of setbacks, however, including an ongoing 
investigation by Canada's Nuclear Waste Management 
Organization regarding allegations that AECL has been 
improperly storing low-level nuclear waste. 
 
4.  (SBU) More importantly, in January 2005 Dominion 
Resources of Richmond, Virginia, announced its withdrawal 
from a cooperative effort with AECL to obtain a U.S. license 
for AECL's 700-megawatt "Advanced Candu Reactor," or ACR-700. 
 Dominion was AECL's only potential customer in the United 
States for the ACR-700, a "next generation" light water 
reactor.  Dominion's decision to drop the ACR-700 was a 
serious blow to AECL's plans, and may have even killed the 
design, as AECL announced soon afterwards that it would 
accelerate development of a newer and larger reactor, the 
ACR-1200. 
 
5.  (SBU)  With no other potential sales in sight in the 
United States or Canada (where AECL's likeliest customers, 
the provincial governments, are focused on expanding 
alternative and renewable energy sources), China may well 
represent AECL's best hope for new orders for the foreseeable 
future.  AECL has previously built two nuclear reactors in 
China, twin conventional, heavy water Candu-6 units at the 
Qinshan complex, each with a gross capacity of 768 megawatts 
each.  During Prime Minister Martin's visit to China in 
January, in tandem with a joint government statement pledging 
cooperation on nuclear energy research, AECL announced 
several cooperative development programs with the Shanghai 
Nuclear Engineering Research and Design Institute (SNERDI). 
 
6.  (SBU) Significantly, the agreement with SNERDI includes 
participation in development of AECL's ACR technology.  The 
agreement will thus give SNERDI input into the design of the 
ACR-1200, and will presumably increase AECL's prospects of 
selling its new reactor in China.  Post interlocutors in the 
nuclear industry have previously voiced concern that with a 
700 megawatt capacity, the ACR-700 was simply too small to 
attract customers, a flaw which AECL has corrected with the 
1,200 megawatt capacity ACR-1200. 
 
7.  (SBU) An Embassy contact with the Canadian Nuclear 
Association, a group of mostly private sector companies, told 
us that the agreement with SNERDI is in part the result of 
renewed Government of Canada political support for AECL.  In 
the past, Federal backing for AECL has ebbed and flowed 
according to the attitude of the incumbent Minister of 
Natural Resources.  According to our contact, the GOC has 
apparently decided to redouble its efforts to promote AECL, 
in part because of its setback in penetrating the U.S. market. 
 
8.  (SBU) Comment: Although AECL is staking its future on the 
ACR design, post contacts opined that the company may, as in 
interim measure, attempt to sell additional Candu-6 reactors 
to China.  Whatever the future course of China's nuclear 
power industry, it will find an eager partner in AECL.  End 
Comment. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
CELLUCCI