China is the growth engine of the nuclear industry today. For more than a decade its domestic construction programme has eclipsed its rivals. Nuclear growth in the county has almost single-handedly propped up the global nuclear sector and made sure it avoided what otherwise would have been a significant contraction following the Fukushima Daiichi nuclear accident.
In case you missed it, in August, the country marched past France in terms of installed nuclear capacity with 64GW on the grid, putting it into second spot on the global pedestal. It had already taken the number two position for nuclear generation, probably as early as 2020, on the back of its higher plant capacity factors.
Sights are now set on the US and that number one spot. It is a question of when, not if, as almost 40GW of new Chinese nuclear plants are in the process of being put together. Sometime around 2031 seems a likely guess. Early in August, eight additional power reactors were granted approval by the State Council, adding around another 9GW to the pipeline. For the US, currently sitting pretty with its installed fleet of 97GW, that under-construction number is currently a big, fat zero. The Chinese nuclear sector has even been going comparatively slowly compared to what experts suspect it is capable of. It in fact missed the nuclear energy target set in the last two national energy plans and may miss the one for 2030. Part of the reason for this seems to have been a strategic reevaluation of technologies and sites following the nuclear accident in Japan. State-level authorisations are well ahead of final construction decisions, suggesting that the central government would like industry to accelerate.
Sometimes global nuclear developments are likened to a race between countries, but there is no genuine competition here. If it were a race, then the Chinese nuclear sector is running laps around the field while European and US companies are still warming up on the blocks.
Whereas Western countries are clearly struggling with nuclear newbuilds, with projects hit by ballooning costs and schedule overruns, China has demonstrated that project success is not only possible but repeatable – and even to be expected. It presents clear evidence of what standardised technology, a mature supply chain, a skilled workforce, ongoing megaproject experience and a regulated state-controlled electricity market structure is capable of delivering. The reported construction costs from the country are astonishing – in the realm of $2,000–3,000 per kilowatt for their Gen III light-water reactor designs. This is a third of what recent US and European projects have managed. Indeed, if these countries could get anywhere close to this figure then we would not be discussing how to make the global nuclear renaissance possible. We would all be in the middle of one, probably philosophising about how much nuclear energy is too much.
This raises an obvious question: why does the rest of the nuclear industry simply not learn from and seek to emulate the Chinese approach? This quickly leads to an obvious and deflating answer – it cannot easily do so. In fact, several Chinese-led construction innovations such as open-top construction and increased modularity of components have made their way into other projects. While these innovations will no doubt have helped these projects they clearly have not single-handedly transformed the nuclear construction paradigm. That said, there is some solace in the fact that Chinese experience shows that there is no fundamental reason nuclear must be expensive. There are pathways to efficient delivery for the countries that commit to this.
It is not one single thing that makes China such an exceptional nuclear growth engine. It is the total package – and some of the factors that clearly contribute to its success are not ones that other countries, especially Western ones, seem eager to try and implement. For example, a state-planned energy economy clearly overcomes private company reticence over project delivery and market risks, but there are no serious moves afoot to renationalise energy systems. Liberalised energy markets look set to continue in the countries which currently have them, despite the myriad challenges now confronting the system. The major Chinese nuclear companies (CNNC and CGN) for the most part seem to be aware of the challenges of building overseas and duly cautious about them. Perhaps they have been put off by the experience of Japanese nuclear companies when they become over-extended in the overseas nuclear business. Or perhaps they are simply fixated on the clearly still growing energy needs within China and prefer to focus their resources there.
Whatever the reason, there does not seem to have been a huge drive to date to see Chinese nuclear projects built overseas. There has long been gossip at nuclear conferences about China emerging as the global nuclear export player, but outside of Pakistan and the units at Chasma and Karachi, China has not moved aggressively into this space. These Pakistan projects have demonstrated that China is certainly capable of supporting nuclear power projects overseas, but perhaps there are questions over the true realised costs and value. To date, all of China’s domestic nuclear plants have been built on the coast and primarily serve these provinces.
The country’s vast interior remains untouched by nuclear power development and if there is any place that would seem to be the natural target for Chinese nuclear expansion, this would be it. The current plan is to keep nuclear development coastal for now, but this could change in the coming years, opening up access to a vast number of potential sites. China is now committed (at least nominally) to constructing NPPs in Kazakhstan and Ghana, but let’s wait and see whether these projects actually make it. The expected Chinese project in Argentina seems to have been permanently suspended. Unlike Russia and its prodigious nuclear export industry, China has not yet established nuclear exports as a tool of profitability and geopolitical influence. Zooming out to look at the bigger picture, it is not clear whether China sits at the centre of the global nuclear industry today, or whether it in fact exists in its own highly successful but self-contained corner of it.
The country still uses external fuel cycle services, especially mined uranium, so there is that, but it has not seized dominance in the same way it has for solar photovoltaic, battery production and electric vehicles, for example. Regarding the fuel cycle, it continues to build up national capacity – clearly targeting full independence. Again, it is unclear whether future fuel cycle exports are a significant priority.
Whether this inward focus is a good or a bad thing probably depends on what part of the nuclear industry you work in, and also where you live. It does mean that within the international market there is still scope for western vendors and technologies to compete. The highly prized nuclear technology future is still up for grabs. However, there are many countries that would no doubt love to have a Chinese-built and financed nuclear plant more readily available as an option. As for its nuclear technology, it is hard not to be impressed by the huge strides China has made. Nothing about Chinese nuclear is second class anymore, if it ever was. It’s research and development sector is thriving and the country arguably has more exciting reactors operating than any other on the planet. This diverse offering includes indigenous large light-water reactors, an operating high-temperature reactor, and a very-soon-to-be-operating terrestrial small modular reactor and commercial-scale fast neutron reactor. Slightly further afield, its molten salt reactor and fusion demonstrations are enviable, and the country is developing uranium mines and seawater extraction techniques.
This year, China joined the pledge to triple nuclear energy. This is yet another welcome sign that the Chinese Government truly supports nuclear energy and intends to see it expand. Whether that expansion takes place purely within the country or expands outside of its borders remains to be seen.
