Light water torture

24 February 2006

“Build nuclear power, enrich the people”, proclaim the billboards at China’s Qinshan nuclear facility 120km south of Shanghai in the south-eastern province of Zhejiang. Qinshan is the centre of China’s nuclear sector and home to five of the country’s nine operational reactors. But as the world’s nuclear industry waits for the Chinese to confirm an $8 billion contract to build four new reactors, the slogans on the billboards at Qinshan seem like empty words.

The announcement in 2004 by Kang Rixin, president of China’s National Nuclear Corporation (CNNC), which owns Qinshan and controls most of the country’s nuclear industry, that China would spend 400 billion Yuan ($50 billion) in an effort to boost its nuclear capacity to 40GW by 2020 was greeted with enthusiasm by the world’s nuclear industry. Expectations were high, because for the Chinese to meet their ambitious target they would have to build two new reactors a year until 2020. In September 2004, tenders for the $8 billion contract to construct the first four, to be located at Sanmen in Zhejiang Province and Yangjiang in Guangdong Province, were invited from Westinghouse, Framatome ANP and Atomstroyexport.

But despite government assurances that the contracts would be awarded by the end of 2005, none have been finalised. There have been hints, reportedly voiced by premier Wen Jiabao during a December 2005 visit to Paris, of China’s dissatisfaction with the high price of the reactors on offer. Now though, there are also fears that Beijing is re-thinking its nuclear strategy and possibly preparing the ground for a scaling back of its plans.

“I don’t think it’s just about the price. The delay in awarding the contracts may indicate hesitation at top government levels,” says one senior expert who did not wish to be named. “There’s nothing unrealistic about the CNNC’s plans. It’s perfectly possible to increase capacity to 40GW by 2020, the French did something similar in the 70s and 80s, but for it to happen it needs backing from the very top levels of the government.”

No one at CNNC was prepared to comment on the possibility that China’s leaders are getting cold feet over the plans to enlarge the nuclear sector. But the CNNC, which was established in its present form in 1999, is a state-owned enterprise directly under the leadership of the State Council and headed by Wen. In turn, the State Council answers to the Politburo, China’s nine man cabinet, of the Central Committee of the Communist Party. In effect, the CNNC can do nothing without the Politburo’s approval.

China’s nuclear industry has suffered at the hands of the government before. Between 1997 and 2003, a number of projects were put on hold as concerns mounted over safety and the costs involved in boosting the nuclear sector. China may be the only country in the world where all the cabinet are trained engineers, but none of them have a nuclear background and, in the past, grandiose hydro projects such as the vast Three Gorges Dam, have taken precedence over developing the nuclear sector.

Until recently, it was assumed that the delay in awarding the contract to build the power plants at Sanmen and Yangjiang was also due to the Chinese government’s insistence that all the technology involved be transferred as quickly as possible. The Chinese are keen on following the South Korean model. Seoul started off by buying foreign reactors in the 70s; now 90% of their reactors are locally made. But both Westinghouse and Framatome ANP, the two frontrunners to win the contract, have made it crystal clear that they are willing to make their technology available to the Chinese. Liu Xingang, Westinghouse’s chief representative in Beijing, said: “The intent is to help China’s nuclear industry achieve self-reliance.”

That the Chinese want to design and build their own advanced reactors in the future is because they regard nuclear technology as a major export opportunity. The Chinese helped Pakistan build the 300MWe Chashma 1 reactor, which opened in 1999, and are now providing assistance for a second power plant and bidding to build a third. That has raised eyebrows in the USA and caused problems when Westinghouse went to the US government’s exports financing arm, the Export-Import Bank, for $5 billion in loan guarantees to back their bid for the Sanmen and Yangjiang contract.

Framatome ANP had no such difficulties, with the French government being an enthusiastic supporter of its efforts to continue expanding in China. The company has had a presence in China since 1986 and employ 3500 staff there. They supplied the technology for the two 984MWe reactors at Daya Bay in Guangdong and for the reactors at next-door Ling Ao.

Framatome can also point to the fact that the reactor it is offering for the Sanmen and Yangjiang plants, the 1600MWe EPR, has already been adopted by other countries: Finland and France. In contrast, Westinghouse has offered the Chinese its AP1000 unit which has passive safety and can operate for two years on one fuel load, but no AP1000s have been built yet.

As recently as December 2005, the French were claiming to be on the verge of being awarded the contract for Sanmen and Yangjiang and, if the reactors go ahead, then they are the favourites to build them. But given Beijing’s pointed refusal to name a new deadline for the awarding of the contracts, it may be some time before the French can start celebrating.


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