Power market developments

China charges on

22 May 2009

As construction continues according to plan in China, the country’s focus has turned to ensuring sufficient uranium supply to fuel the future fleet. By Wang Fangqing

With eleven new reactors under construction in China (equal to the number in operation) and many more planned, the country’s plan for up to 60GW of installed nuclear capacity by 2020 looks to be on track.

In 2008, construction officially started on six new reactors in China, including the largest nuclear power plant to be approved by Chinese planners so far, Yangjiang. The first unit at Yangjiang in Guangdong province began construction in December, and first operation is scheduled for 2013. Construction of a second unit is imminent. Six domestically-designed 1080MW CP-1000 reactors are planned for the site with total investment in the project estimated at some CNY70 billion ($10 billion). Late 2008 also saw construction start on Fangjiashan in Zhejiang province, and Fuqing in Fujian province.

Further construction is planned to begin this year. The start of construction on China’s most notable project, the world’s first AP1000, is imminent, with pouring of the first concrete at the Sanmen site in southeast Zhejiang province scheduled for April 2009. Initially two AP1000 units are planned for the site, with the first expected online in August 2013.

According to the China’s National Development and Reform Commission (NDRC), the construction of another twin-unit AP1000 plant, Haiyang in Shandong province is due to begin this year. Construction is also slated for the Taishan (Yaogu) nuclear power plant in Guangdong province where two 1700MWe Areva EPRs are planned. China’s first inland nuclear power plant, Dafan, to be built in Xianning city, Hubei province, is also projected to get started in 2009. Details are still under discussion, however.

Dafan is also considering the AP1000 in its third stage of construction which would require a total investment around CNY4.5 billion ($650 million), according to the local government in Xianning City.

Investment increases

Chinese investment in nuclear power soared in 2008, jumping 71% from the previous year, while investment in coal-fired plants dropped 22%, according to the China Electricity Council. The national energy plan has earmarked about CNY250 billion ($36.5 billion) for investment in nuclear facilities and equipment in the next 15 years. The plan aims for an increase in China’s nuclear power generating capacity to 60GW, compared with the current 9GW of installed capacity.

In addition as part of a CNY4 trillion ($585 billion) economic stimulus package announced by the Chinese government in November, CNY800 million ($117 million) is to flow into the development of nuclear power and wind energy.

The resulting heavy investment will not only go into construction of nuclear power plant buildings, but also the nuclear island, and China’s supply chain is gearing up. In late 2008, China officially adopted the AP1000 as the standard for its inland nuclear power projects, following a meeting held by the State Nuclear Power Technology Corporation (SNPTC).

The AP1000’s advantages include modular construction techniques and passive safety technology. As a result, Westinghouse’s spokesman Scott Shaw said that through AP1000 technology transfer, “China will create its own and self-sustaining nuclear energy infrastructure and be able to compete globally in other nuclear energy markets.”

In June, Harbin Power Plant Equipment Corp (HPEC), the largest manufacturer of its kind in China, announced that its subsidiary in Qinhuangdao, Hebei province had completed a facility to manufacture components for the AP1000, which will be for both domestic and international supplies. According to HPEC’s general manager, He Huaqing, the first Chinese-made AP1000 components will be produced there for the Sanmen and Haiyang plants.

On 12 January Shenzhen-based China Guangdong Nuclear Power Holding Co Ltd (CGNP), announced that it has developed the secondary pumps, such as residual heat removal pumps and electric auxiliary feedwater pumps, for 1GW nuclear reactors, giving Chinese buyers a domestic option for the first time.

Though China is going to develop more of its own technologies (as it has developed the CP-1000), foreign companies still have plenty of opportunities to enter the market. China will still have to rely on imports for various components, including reactor coolant pumps, according to Cao of Shanghai Jiao Tong University. The reactor pressure vessel for the new phase at Qinshan nuclear power plant, for example, was manufactured by South Korea’s Doosan Heavy Industries and shipped to China in February. The pressure vessel, measuring 6.3m by 12.4m and weighing some 300t, will be used in the sixth reactor at Qinshan – a 650MWe CNP-600 scheduled to begin commercial operation in 2011.

Foreign firms can also offer help with specific technology. Inge Watertechnologies AG, the Germany-based water treatment technology provider, is an example. It inked an agreement with China (the exact contract partners have not yet been disclosed) last summer to equip the Hongyanhe nuclear power plant, which is currently under construction in Liaoning province, with ultra-filtration modules, to be used for seawater desalination.

In January, London-based Invensys Process Systems was selected by the China Nuclear Power Engineering Corp, which is in charge of the design and construction of Fuqing and Fangjiashan nuclear power plants, to develop four fully-digitised nuclear control rooms with modern technology such as critical control and safety systems. According to a communiqué, the whole contract is valued about $250 million.

The Chinese government has accelerated the pace of establishing nuclear power regulations to match the fast development of the industry. According to the 2008 work plan released by China Atomic Energy Authority, regulations such as for work that precedes construction of a nuclear power plant, and regulation of construction and equipment need to be completed urgently. A priority is regulations for pre-construction work, which are largely absent according to the plan.

The resulting standardisation of nuclear power facilities in the country will certainly benefit Chinese suppliers. “These standards will be basically about materials and compatibility. As far as I know, the China Machinery Industry Federation is now working on it,” Cao said.

Currently, depending on reactor

suppliers, the standards of the USA, France or Canada, are being used among the 11 reactors now in operation in China. At an industry conference held in Shanghai last year, Dr Ouyang Yu, a member of the Chinese Academy of Sciences and the chief engineer in charge of the project at Qinshan, whose reactor suppliers include Westinghouse and AECL, said that regardless of the current regulatory zeal, China will continue to use two different standards for a long time – the ASME (American Society of Mechanical Engineers) and the French RCC-M.

Fuel for future fleet

Meanwhile, the country’s ambitious new build plan is pushing China to seek uranium to meet its future demand.

Indeed, some 8769tU/y will be needed by 2020 to meet the government’s expansion plan, according to Chen Xuehui, deputy president of the state-run China International Uranium Corporation (also known as Sino-U). This is double the projected requirement of 4058tU for 2010. Despite recent discoveries of indigenous resources (see below) China still needs to cooperate with other countries and to explore overseas, because in the long run, domestic exploration will not be able to meet Chinese demand, Xuehui said.

Kazakhstan and sub-Saharan Africa have been identified as particularly useful sources. Last November, China signed an agreement with Kazakhstan state-owned company Kazatomprom, a key uranium supplier, to jointly mine and process uranium into nuclear fuel in Kazakhstan, which hosts one fifth of global uranium deposits.

In October, the Shanghai Touchroad Group, a private international trading group, was reported to have obtained the exploring and mining rights of mineral resources covering an area of over 50,000km2 in a country within southern Africa. The move was supported by a Chinese regulation issued in March 2008, which encourages both state-run and privately-owned Chinese companies to seek uranium resources globally to contribute to the domestic nuclear power industry.

This was not the first time that Chinese uranium buyers scanned Africa for supplies. CGNPC acquired a 49% share in Areva’s Trekkopje project in Namibia (to include the off-take of 50% of the mine’s uranium production) in November 2008. In March, Beijing-based Sinohydro Corp signed a contract valued at $139 million with Sino-U, to build the Azelik mine based in Teguida, Niger. Azelik is estimated at having a potential output as high as 600,000tU/y. Early in 2006, Sino-U started to build Azelik with the local government, but the work stopped in August 2007 due to the country’s unstable political situation.

China also has a stable supply from BHP Billiton. The Australian-based mining giant announced in September that it would supply uranium to China for decades.

Inside China, according to the Xinhua News Agency, the country’s first 10,000t level-leaching sandstone-type uranium deposit was discovered in early 2008 by a group of Chinese geologists in Yili Basin, northwestern

Xinjiang region. Meanwhile, a potentially larger deposit in the Ordos area, Inner Mongolia, was discovered by the China National Nuclear Corp (CNNC). If estimates prove correct this will be the biggest discovered deposit in the country so far.

But there could be more finds. Currently, only 40% of China’s potential uranium resource has been explored, according to a manager of CGNPC Uranium Resources Co. Ltd.

Vast expanses of northern China are now being scanned for uranium deposits by geologists. China Nuclear Geology, a unit of the CNNC, has begun further exploration in the basins of Xinjiang. It has also been researching volcanic-type uranium deposits in the in areas such as Manzhouli, eastern and western Liaoning province, it said.

Exploration in southern China is not lagging behind either. In December, the Geology & Exploration Bureau of Guangdong Province received approval from the Ministry of Land and Resources for a new research project in northern Guangdong province. It was the first time for the local bureau to explore uranium resources again after exploration ceased a decade ago.

Furthermore, China is also trying to expand overseas demand too. The country’s latest deal, finalised in January, is for building two 320MW plants for Pakistan. The project, known as Chashma power project 3-4, costs more than PKR137.3 billion ($1.7 billion) and is scheduled for completion in eight years, according to media reports. Also, in August, China signed an agreement with Jordan, marking the start of the cooperation covering research; plant

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