China has been increasingly resorting to nuclear power as its
main source of power, given its advantages compared to the power
generated from coal or wind. To help China in the endeavor,
Chicago Bridge & Iron
) was recently given the charge to jointly build nuclear power
plants in China.
Chicago Bridge announced on Oct 1 that it has agreed with
CPI's Power Engineering Company, (a subsidiary of China Power
Investment Corporation) to form a joint venture to construct
nuclear power plants in China. Chicago's shares reacted
positively to the news and 1.1% to $70.78 on Oct 2, 2013 but
declined 0.4% on Oct 3, 2013.
According to the agreement, Chicago Bridge is required to
provide engineering, procurement, construction management,
commissioning, project management and technical support services
for the nuclear plants that are to be constructed.
China Power Investment Corporation is China's biggest power
generation company, which owns one of the three nuclear power
plants in China. These power plants are planned and funded by the
China Power Investment Corporation.
The shift toward nuclear energy started during the 1970s and
by 2005 this industry has developed rapidly in China. According
to a report by the National Energy Administration (NEA), China is
expected to make nuclear energy the foundation of its
power-generation system in the next "10 to 20 years". The country
intends to add about 300 GWe of nuclear capacity over that
period. A report from National Development and Reform Commission
(NDRC) mentioned that 3240 MWe nuclear capacity would be added in
Since 2012, the State Council of China has permitted
construction of four new nuclear power plants and it is expected
that the state Council will approve about 30 more nuclear power
plants by 2020. This rapid increase is primarily to meet the
nuclear power capacity set in China's Mid- and Long-term
Development Plan for Nuclear Power.
This joint venture will benefit Chicago Bridge to strengthen
its capacity and capability in the nuclear power market. Chicago
Bridge acquired The Shaw Group in Dec 2012 in order to increase
its presence and expand its competence in the nuclear power
Chicago Bridge & Iron Company N.V. provides conceptual
design, technology, engineering, procurement, fabrication,
construction, and commissioning services to energy and natural
resource industries worldwide. It currently carries a Zacks Rank
Other companies in the energy sector worth considering at the
Micheal Baker Corporation
Foster Wheeler AG
Quanta Services Inc.
). Micheal Baker has a Zacks Rank #1 (Strong Buy), while Foster
Wheeler and Quanta Services carry a Zacks Rank # 2
BAKER (MICHAEL) (BKR): Free Stock Analysis
CHICAGO BRIDGE (CBI): Free Stock Analysis
FOSTER WHELR AG (FWLT): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
To read this article on Zacks.com click here.