The media is currently full of dramatic growth stories about Chinese economic development, almost as if it began only yesterday. In fact, China has been growing very quickly for almost two decades now, but its low position in 1980 meant that even a country of 1.4 billion people has only now begun to have an appreciable influence in the world economy. The low-cost manufacturing base stands out as formidable to overseas competitors, while the demands for energy and raw material imports are having an important influence on world markets. But what about China’s actual and potential influence in the world nuclear industry?
China is a nuclear weapons state, and its nuclear sector still bears the hallmark of its previous domination by military objectives. In fact, it bears some resemblance to the Russian industry ten years ago, as there is obsessive secrecy about facts and figures and only a slowly emerging understanding of the requirements of a commercial nuclear sector. For example, there are no official figures for Chinese uranium production.
However, unlike India, China is not constrained by an inability to import technology and materials from abroad – indeed, China was recently accepted as a member of the Nuclear Suppliers Group, which forbids trade with India owing to its refusal to sign the Treaty on the Non-Proliferation of Nuclear Weapons.
China currently has nine nuclear reactors in operation, with two under construction. Four are of Framatome design and two are AECL Candu units, with the other three of Chinese origin. The two reactors under construction are Russian VVER-1000s and should commence operation by the end of 2005. Once in operation, the combined capacity of the Chinese reactors will be 8350MWe.
To put this into context, it is really a drop in the ocean within Chinese electricity supply, accounting for only 2% of installed capacity. Each year, China is commissioning over 30GWe of electricity generating capacity, predominantly coal-based but also including a lot of hydro. Indeed, the Three Gorges Dam will itself add 18GWe to capacity – double nuclear’s total, although the prime motivation for this monumental project was more to do with flood control than power.
The interesting question now concerns the likely extent of the future nuclear construction programme and in particular how significant it will be in world terms. It is clear that nuclear provides no immediate solution to China’s current power shortages, which have resulted in blackouts for industry over the warm summer months. This must be sought by demand control (including a move to more realistic market-based pricing) and further additions to the stock of fossil fuel generating plants. Over the longer run, however, it is possible to see nuclear increasing its share of total electricity generation, with nuclear capacity rising to around 40GWe by 2020, which should be 5-6% of the total then. Indeed, this figure has been mentioned in official circles as a target. But to get there is going to require a nuclear programme of a similar magnitude to that of France in the 1980s, with two or three 1000MWe reactors coming into operation each year from 2008-2020. Is this realistic?
Gaining approval from government for new reactors is certainly a torturous process. In the ninth Economic Plan (1996-2000), nuclear fared rather badly. This has been blamed on concerns about the economics of nuclear compared with alternative technologies and also a desire to spur economic development away from the prosperous coastal areas (where nuclear plants would be located) in favour of the underdeveloped central and western areas of China (where hydro and coal are centred). Some of this has spilled over into the tenth Plan (2001-2005) and this has caused the log-jam of new plant approvals which are now pending. After the twin VVER-1000s come into operation, there will be a gap of a few years before anything else starts up, as construction has not even begun on the next set of reactors.
There are good grounds to see 40GWe by 2020 as realistic
Four of these have preliminary approval (two at Ling Dong in Guangdong province, next to the four Framatome reactors at Daya Bay/Ling Ao and two at Sanmen in Zhejiang province, close to the Qinshan site) and it is expected that construction will begin soon, for commissioning in 2008.
Beyond these four reactors, however, things are less certain, but there are many grounds for optimism. The state planners and political leaders now seem happier with nuclear. They have seen that reactors have come into operation on or even ahead of schedule and also on cost. They are also running at high load factors and the safety record is good. Concern about China’s environmental problems is rising, particularly the emissions of coal-fired plants near the crowded cities, and nuclear’s beneficial aspects are well-understood. The contribution that a nuclear power plant makes to economic development in local areas has also been well-noted. Indeed, this spurring of local economic development has led to many provincial governments in China making preliminary plans for nuclear power plants in their areas and not just in the coastal provinces. Outside commentators often make the mistake of ignoring regional political power in China, wrongly seeing it as a monolithic centralised and undemocratic state. Within one-party communist rule, the provinces have a lot of sway and there are routes for local opinion to pass through into policy in Beijing, through various consultative committees. There is therefore an unusual situation in China, whereby it appears to be the local people who are pressing the government for more nuclear power plants, rather than the government sweeping the issue under the carpet as is the case in most of the rest of the world. There is, however, some concern within the Chinese industry about the future of public opinion on nuclear, particularly as the country gets richer. Yet there is determination to learn lessons from the mishandling of key issues by the Western industry, such as safety, waste management and proliferation.
So there are good grounds to see 40GWe by 2020 as realistic. Unless there is a revival of nuclear in North America and western Europe, this is likely to be the main growth area for the nuclear industry over this period (notwithstanding similar plans but on a smaller scale in India).
All the key world reactor vendors are now targeting China, including AECL, Framatome ANP, Westinghouse, GE and its Japanese partners, the Russians and the Koreans. The Chinese are currently playing a cute game, playing these off against one another for new orders. China will almost certainly follow the Korean route, in the end, of developing and then adopting a standard plant which will be built in great numbers. This is likely to be an LWR (almost certainly a PWR), and a hybrid of existing Chinese designs and what can be learned from foreign partners.
There are other issues worth noting with regard to nuclear in China. On uranium supply, it is clear that the Chinese resource base is poor and that it will become a significant net importer. Production is believed to be no more than 750 tonnes of uranium per annum and with requirements approaching 2000 tonnes each year from current reactors, inventories are being drawn down and some initial contracts with overseas suppliers entered into. On spent fuel management, China has adopted a closed cycle, but doesn’t yet have the facilities to reprocess the spent fuel and then use MOX or reprocessed uranium. Spent fuel is being moved from reactor sites and will eventually be reprocessed, a strategic decision which seems to be based largely on China’s uranium weakness.
Concerning other fuel cycle facilities, China has growing enrichment capacity supplied by Russia, both gas diffusion and centrifuges, which amount to about 1.5 million separative work units per year. There are also fuel fabrication facilities for both PWR and Candu fuel, which can be expanded to meet local need. Therefore over a period of time, China aims to become increasingly self-sufficient in its fuel cycle needs, with the obvious exception of uranium, a notable weakness that is difficult to plug. Within reactor development, China has already exported one 300MWe PWR to Pakistan, with another already ordered. Tsinghua University has also developed a small high temperature gas cooled reactor, which is currently operating. Although it will be a long time before China will be a major nuclear exporter, it sees itself as a friend of other developing countries and will follow Korea in seeking nuclear cooperation with these. In particular, it has recently been in discussion with Brazil and may source some of its uranium requirements from there.
China will become increasingly important in the world nuclear industry, just as it is doing so in other key sectors of the global economy. The continuation of this is, however, dependent on avoiding a spectacular economic meltdown, following the years of incredible growth.
Steve Kidd is Head of Strategy & Research at the World Nuclear Association, where he has worked since 1995 (when it was the Uranium Institute). Any views expressed are not necessarily those of the World Nuclear Association and/or its members.
|Steve Kidd June 2004 pullquote|
|It’s clear that a major investment programme is long overdue|