Thank you.
I am pleased to have this opportunity to address the standing committee and exchange some views regarding something that is so vital to our country: the nuclear industry. It produces energy without CO2 and has a total life-cycle carbon footprint similar to that of wind-generated power.
AREVA is a company that has focused on energy production without CO2 production. Yes, we are a nuclear company, but we're also a renewables company, with wind, biomass, and solar. We believe in the right mix of energy solutions, and although we believe that nuclear energy is not the only solution, it is part of the solution.
At AREVA we have 75,000 employees worldwide in a vertically integrated company engaged in CO2-free power generation. We incorporate activities ranging from mining through to the manufacture of reactors, nuclear services, spent fuel reprocessing, and electrical transmission and distribution. Here in Canada we employ over 1,100 people across the country. We have been conducting uranium exploration and mining activities in Saskatchewan for over 40 years.
I'm sure you've heard of the nuclear renaissance around the globe, and yes, it has been slowed by the ongoing global economic and financial crisis. Some potential customers, such as U.S. utilities, have delayed their investment plans, as they have felt the need to clean up their balance sheets before going forward.
In this industry, we're used to thinking in terms of decades, not weeks or months. Whatever the current difficulties, it's a simple truth that in the next few decades a huge investment will be needed to cover the world's energy demand.
In the long term, demand for energy will continue to grow. It's a moral imperative. There's simply no way to reduce poverty in a growing world population without increased energy consumption.
The current generation capacities will age and need replacement. The price of fossil fuels may be low today, but oil and gas reserves are not infinite. These prices will almost certainly escalate when economic growth resumes. In the meantime, the world will keep looking for CO2-free electricity generation to reduce global warming.
Our estimate is that the demand for new nuclear reactors will reach approximately 300 by 2030. Countries such as China have massive reactor-building plans, and others such as France and the U.S. are looking at steady development and replacement over the next decades. Twenty-five building sites are active as we speak, with 16 in Asia, five in Russia, and four in Europe.
More importantly, perhaps, the industry is still investing. We recently announced a major investment plan to expand the capacity of existing equipment factories in Europe and to build new facilities in the U.S., where we will have reactor orders.
But demand is not enough. We need to adapt and organize to answer that demand. That is what has happened all over the world in the nuclear industry in the past few years.
First of all, we have experienced significant consolidation. Initially this was due to the increased costs of designing and building nuclear plants that are both safer and more economical than the existing fleet, the models known as generation III reactors. It took hundreds of millions of dollars to design generation II reactors, while the bill amounts to several billion for each generation III design.
This means that no one can go it alone anymore. Our industry has had to give up on that quaint, outdated notion of national champions that are able to do everything by themselves.
AREVA was created in 2001 through the merger of French, German, and American companies. In 2007 we partnered with Mitsubishi to create ATMEA, a joint venture for new plant design and the development of new nuclear fuels.
I don't represent a French company at all; I represent a multinational company headquartered in Paris. This company sells global technology, not French technology. This technology evolved out of a U.S. design, thanks to the common work of French and German engineers who, for our next products, will be complemented by Japanese teams, proven out of experience from China and Finland. Of the 102 nuclear plants that AREVA has built or is currently building, only 59 are in France. The rest can be found in 10 different countries over four continents.
This is the only way it can be today. AREVA was not the only company to gain a global industrial foothold in the last decade. All of our major competitors did as well. In 2006 Toshiba purchased Westinghouse and created the third-largest nuclear company in the world, straddling the Pacific. In 2007 GE and Hitachi joined forces in a series of joint ventures. This is the new face of nuclear: large multinational companies that can reach across the continents, bring together R and D teams of thousands, and invest billions of dollars in the development of new designs.
AREVA spent $1.2 billion last year on research and development. That does not include Mitsubishi's share of our new reactor developments. But it's not enough to consolidate existing resources. We must also prepare for the future by hiring the right people and organizing a strong global supply chain. Crisis or no crisis, AREVA needs the best people available to deliver the best products and services.
In 2008, we hired 12,000 new recruits globally, but based on the current economic situation, we have taken a recruitment pause. At the same time, we have invested massively in the supply chain, in some cases through acquisition, while sometimes we have expanded or created new factories. As I have mentioned in other cases, we chose to build long-term strategic partnerships to ensure future deliveries, just as we would like to do more of here in Canada.
Typically these partnerships serve both a global and a local purpose. Globally, they give our partners an opportunity to provide highly specialized components to our new builds around the world. Already this is happening with Canadian companies as well. The plant we're building in Finland has Canadian valves and a Canadian simulator.
Locally, these partnerships allow us to build at a lower cost and with maximum benefits for the local economies. This helps us build local skills in a way that is consistent with our responsibilities as the industry leader.
How does this apply to the Canadian situation? It applies directly. Since AREVA has a strong record of partnering with local companies in our other markets, I do not see why anyone could believe that the situation would be different for us here in Canada. Our corporate track record with uranium-mining joint ventures in Saskatchewan supports this.
Canada has a great nuclear tradition. Even more importantly, this country kept its skills alive when others were letting their own industry decay in times of low demand. AREVA's database includes the resumés of 25,000 Canadian nuclear professionals. That's a very attractive situation for a company such as ours that needs the best skills worldwide.
If AREVA were to win a reactor in Canada, it would be absurd to believe that anybody with nuclear skills in this country could lose their job. The exact opposite is true. We would need not only to preserve the existing skills, but to build even more of them in Canada, as we have done elsewhere.
I want to touch briefly on the current process in Ontario. We are of course disappointed regarding the current suspension of procurement. We believe that a long-term focus is needed to supply energy here. We are proponents who think that the Province of Ontario should start an initiative to build a reactor in Ontario now. Of course, we would like it to be AREVA technology. We are interested in and have offered the federal government the possibility of transferring a licence for proven AREVA technology to Canadian entities, including, possibly, AECL.
A licence transfer to Canada would create new jobs in the nuclear industry here and will guarantee that existing skills remain in Canada. Canada could have access to the light water reactor technology market, which is 90% of the world requirement. This is about diversification, not replacement. Canada will naturally retain its role as a leading heavy water player while gaining expertise in light water technology. AREVA would be proud to accompany the Canadian nuclear industry in this diversification process and to create long-term partnerships.
There's also the U.S. Already, U.S utilities have announced that they will build seven AREVA reactors. Four of these projects are already in front of the U.S. safety authority, while three others have been delayed due to the current economic crisis. When this is over and AREVA finds itself building two reactors or more at the same time in the U.S market alone, we will need all the help we can get. We'll need engineers, valves, electrical equipment, construction capabilities, and uranium, you name it. Canadian industry would be a valuable partner in this venture.
What about the waste? That's always the question I get asked in this business. Well, at AREVA, we believe we have part of the solution. It's an innovative concept: recycling. How does that work? We have the technology to reduce the volume of hazardous waste by approximately 80% to 90%. The plutonium and uranium from spent fuel are recyclable and final waste can be stored or buried after the process of vitrification.
North American jurisdictions have not yet come to grips with this issue, but I personally believe it is one of the key topics that will ensure the sustainability of the nuclear industry going forward. It needs to be taken on here in North America.
The topic of isotopes has received a lot of visibility recently. We think AREVA can help. We have successfully built research reactors in many jurisdictions and we are confident we can do so here in Canada. We think it makes sense to do this in cooperation with a Canadian university engaged in nuclear research.
AREVA has also been concerned with the federal government's non-resident ownership policy related to uranium mining in Canada, having advocated its elimination for a number of years. We were encouraged by the Competition Policy Review Panel recommendation last year and the subsequent commitment of the federal government to implement those recommendations, in particular in the domain of uranium mining.
This policy required non-resident owners to reduce their ownership in a uranium mine below 50%. Obviously, without the elimination of this restriction, AREVA would be discouraged from continuing our 40-year interest in Canada, where our long-term presence both in exploration and in mining operations has been a significant development factor, with billions of dollars invested, resulting in employment and business opportunities that are often focused on northern aboriginal communities.
This policy could hinder several more billions of dollars of potential investment in exploration and development projects in Nunavut and Quebec. We are hopeful that the non-resident ownership policy will be eliminated.
The electricity industry is at the dawn of a new era, an era that promises to deliver steady, reliable, zero-emission energy to meet the growing need in both developed and developing nations. AREVA is proud to be the industry leader and to work with governments in developing a long-term view in this sector. We look forward to helping Canada carve out for itself a significant role in the growing market.
Thank you.