China's Ambitious Plan for More Nuclear Power
May 28 - International Herald Tribune
Nuclear power companies in China aim to join automobile and electronics
makers as export powerhouses, but big domestic expansion plans may not leave
them the capacity to make an overseas push for more than a decade, analysts
say.
A $1 billion deal signed last week with Russia to build and supply a uranium
enrichment plant in China was another step toward civilian nuclear
independence, less than two decades after China's first nuclear generator
came on line.
The country sealed deals last year with Areva of France and Westinghouse for
several third-generation reactors and the blueprints to allow them to
develop domestic versions.
The nuclear power companies have mastered the construction of older models
at a speed that is impressing Asian neighbors who cannot afford nuclear
models sold by Western companies or are not allowed to buy them.
Countries like Vietnam and Indonesia are eager to build plants to convey a
sense of modernity and to cut their fuel bills, and they see Beijing as the
answer to financial and political problems.
"They know the Chinese have a lot of money and they're not necessarily as
rigid as Western investors," said Bob Herrerra Lim, an analyst for Eurasia
Group, a consulting firm based in the United States. "The Chinese could be
the accelerator. They could say, 'We're willing to take a longer term look,
because these countries have a strategic value to us.' And obviously there's
a lot of policy behavior in many of their companies."
The timing could not be better for China, as the fight against climate
change and the search for cheaper energy sources revives global interest in
nuclear power.
"Their technology will improve, and worldwide demand is big," said Colette
Lewiner, an analyst at Capgemini, adding that when demand starts to grow at
a high pace again, "Areva, Westinghouse and other nuclear reactor suppliers
cannot meet it on their own."
"I know it is serious," she said, because the Chinese had "told me they are
looking for partners to export the technology."
But China is also ramping up its domestic nuclear expansion plans, aiming
for a total of 60 gigawatts by 2020. Its current nuclear capacity is only 9
gigawatts, less than 2 percent of its total installed power generation
capacity.
Its own experts admit that they will have to devote most of the country's
technical knowledge and a large portion of the capital of both listed and
state-owned companies to what will be the fastest nuclear build-out the
world has ever seen.
China will need to start construction on about four new generators a year
through 2015 to meet its ambitious target.
Beijing sees nuclear plants as a partial answer for its mounting pollution
and energy security problems, although China's electricity use is growing so
fast that even after the breakneck expansion nuclear will provide only about
5 percent of its power.
The speed of the expansion is tying China to the second- generation models
that have faced teething troubles rather than the safer third-generation
plants it has begun buying.
Ambitious managers at all the country's big five listed power companies want
to join the sector, once the preserve of two state- owned firms.
One of the country's biggest electricity producers, Datang International
Power Generation, has already invested in the Ningde Plan in southeastern
Fujian Province, with the first reactor due to come on line in 2012.
Nuclear is attractive because it diversifies Datang's generating mix, adding
a type of plant with a relatively predictable operating margin because fuel
is such a small portion of costs.
Despite China's desire for a speedy expansion, its focus on developing
domestic technology means companies like Westinghouse and Areva are unlikely
to repeat deals for entire plants.
But they will be rewarded for handing over some of their secrets by a
continuing stream of smaller deals for parts that Chinese companies cannot
yet manufacture or cannot produce on a large scale.
"In the future, I see a two-way flow of business," Lewiner said. "There will
not be so many sales of big third-generation plants, but equipment sales to
China will be good."
"In the other direction," she added, "Western firms will be re- exporting
from China nuclear equipment and sharing skills."
Another area where Areva looks set to pick up steady business in China is
reprocessing nuclear waste.
"Fuel manufacturing and reprocessing of used fuel are areas where China
needs Western technology, because they cannot do this on an industrial
scale," she said.
Originally published by Reuters.
(c) 2008 International Herald Tribune. Provided by
ProQuest Information and Learning. All rights Reserved.
|