Ken Silverstein EnergyBiz Insider Editor-in-Chief

The paradox facing the Chinese is similar to the one confronting the United States and Europe. That is, the demand for energy is expected to escalate but the types of fuel sources that are most prevalent today -- coal and natural gas in many parts of the world -- are dirty and finite. Nuclear power, which has been taboo since the incident at Three Mile Island and the deadly accident at Chernobyl, now shines: 21st century technologies promise to be safer, cleaner and more efficient.

China's nuclear program is aggressive. Its economy is growing at 8 percent annually and it needs about $1.4 trillion to modernize its energy infrastructure. To get there, it's importing nuclear technologies from Canada, France and Russia. China has twin goals: to reduce its reliance on coal that now comprises about two-thirds of its generating mix while increasing its nuclear portfolio from 2.3 percent of its generation today to 6 percent -- 40,000 megawatts -- by 2020. By 2050, the aim is to have 150,000 megawatts of installed nuclear capacity.

China has several deals in the works. Its newest project is Tianwan station and is near Shanghai. It is expected to begin operations by year's end. Meantime, the nation is also building a nuclear power plant in the southern province of Guangdong at a cost of $8 billion with construction expected to begin late this year. It also expects to construct as many as six new nuclear plants in the northeastern province of Liaoning.

"The international nuclear industry is 'beating a path' to China's open door," says John Moens, an analyst for the U.S. Energy Information Administration, in a report. "Asia is a growth market for nuclear power."

While the United States is generally apprehensive about additional nuclear development, China has brought six plants on line since January 2002, says Moens. "The question is no longer: can China's nuclear industry maintain its current growth rate? The question now being asked: can China accelerate that growth rate to meet the even more ambitious pace of its new energy plan?"

China is now awarding billions in contracts to build even more reactors. France's Areva, Russia's AtomStroyExport and Westinghouse are among the bidders, all of which say they can offer the most advanced nuclear technologies now available. All of the focus points to a renaissance happening in the nuclear sector -- not just in China but perhaps around the globe. The objective is to come up with newer and better technologies that are not only safer but also more environmentally friendly.

Relentless Battle

While China now relies on imports to meet its nuclear energy needs, it expects to use its own technologies in the next 20 years. In the works: fast neutron reactors that reduce radioactive waste that must be buried deep underground. Its ultimate objective is to move away from such "nuclear fission" technologies that lose much of the heat in the thermal-to-electricity process and toward "nuclear fusion." That technology operates at higher temperatures, creating more usable energy and even less nuclear waste.

In this country, President Bush says America's "addiction" to oil can be partially broken by using more nuclear energy. Toward that end, the Idaho National Engineering and Environmental Laboratory and the Argonne National Laboratory have been chosen by the Department of Energy to research and develop a new line of nuclear generators.

The Idaho Lab says that the next generation of nuclear reactors -- Generation IV -- will be ready for global deployment by 2030. The Very-High-Temperature Reactor (VHTR), a graphite-moderated, helium-cooled reactor, can simultaneously be used to make hydrogen, and these can be ready sooner, possibly by 2015. Most of today's reactors use water-cooling, but do not run hot enough for hydrogen production.

Meantime, the 2005 energy law provides $1.1 billion in incentives to help jumpstart nuclear energy in the United States. "We ought to start building nuclear power plants again," President Bush said in a recent speech. "Technology is such that we can do so and say to the American people, these are safe -- and they're important." The president points to France, where about 80 percent of all power generated is derived from nuclear energy.

Second Chance

It's been a relentless battle for nuclear proponents. But, changes in environmental standards along with growing energy demands have combined to give the industry a second chance. In the last six years, the U.S. Nuclear Regulator Commission has renewed operating licenses for 30 older plants. Dominion Resources, Entergy Corp. and Exelon Corp. have filed for early site permits to build new reactors at existing locations.

The NRC has also certified a modern reactor designed by Westinghouse in a process that took 30 months, much less than the prior review time of about seven years. At the same time, AREVA NP, formerly Framatome ANP, and Siemens have formed an alliance to build reactors here in the United States. They currently design and install 30 percent of the world's nuclear generation capacity and provide nuclear fuel to 46 percent of it.

What does all this portend? Nuclear energy currently comprises 16 percent of the global energy mix. But the International Atomic Energy Agency says the use of nuclear energy will grow because of environmental concerns over fossil fuels and the fact that they are a depleting resource. It predicts nuclear power will generate 27 percent of all worldwide energy by 2030, although most of the growth will occur in Asia where 22 of the last 31 plants have been built.

"We are building on what we already know and we are trying to make the next generation of nuclear reactors better," says Kathryn McCarthy, director of nuclear science and engineering at the Idaho Lab in Idaho Falls, in a prior talk with this writer. "We are designing these plants with the appropriate safety mechanisms -- to shut down automatically if there is a problem."

With the haze lifting over nuclear energy development, its future is brighter than ever. Global energy demand is increasing and most of the world needs fuel diversity - a reality that is gradually setting in for some formerly ardent foes of nuclear power. Safety and costs will undoubtedly remain paramount issues while China will be at the forefront of most new nuclear development. The world waits.

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