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Saturday, Mar 18, 2006

Opinion

Opinion - Leader Page Articles

China turns to nuclear power to fuel growth

Pallavi Aiyar

Over the next 15 years, China is planning to increase its nuclear power capacity four-fold. For, its burgeoning economy has led to a gargantuan appetite for energy.

EVEN AS the debate in the U.S. Congress sets in motion the process of implementing the Washington-New Delhi civilian nuclear agreement, India's neighbour, China, is embarking on one of the most ambitious expansions of nuclear energy capabilities in recent decades.

Over the next 15 years, China will bring online 30 new nuclear power plants, leading to a four-fold increase in its nuclear energy capacity, up from the current 8,700 MW to some 40,000 MW. So far Beijing has committed to $50 billion towards the new constructions. The country's 11th Five-Year Plan (2006-10) lays special emphasis on nuclear power plant development. Sixteen provinces and municipalities have already announced plans to build reactors.

At present, China has nine operational reactors and two more are under construction with nuclear energy accounting for about two per cent of its total electricity output. According to government targets, this will double to four per cent by 2020. Even then the percentage of electricity generated from nuclear plants will be far behind today's world average of 16 per cent. Japan for example gets about 30 per cent of its electricity from nuclear sources.

Nonetheless, China's plans call for one of the boldest nuclear construction binges since the U.S.' expansion in the 1970s. "China's nuclear energy is set for `lift-off'" said Chen Hua, a Director of the China National Nuclear Corporation (CNNC), the government body responsible for both civilian and military nuclear development.

The reasons behind China's determination to push forward its nuclear capabilities are similar to those in India. Chronic electricity shortages of 35 million KW in 2004 and 25 million KW in 2005 forced Beijing to recognise its deteriorating energy situation. The demands of China's burgeoning economy have led to a gargantuan appetite for energy. China recently overtook Japan to become the world's second-largest consumer of energy, after the U.S. To sustain its annual economic growth rate of about 10 per cent, China estimates it will have to double its electricity-generating capacity every decade.

"China's energy crisis is severe. In 2004 no less than 26 provinces reported energy shortages," explained Professor Xia Yishan, Director of the China Energy Strategy Centre, a government-affiliated think-tank. Indeed for the last few winters even Beijing residents, usually protected from the shortages common in the outlying provinces, had to don extra woollens in an effort to stave off the cold — energy shortfalls led to the turning down of heating in most buildings.

Simply expanding the use of coal, on which China is already dependent for 70 per cent of its energy needs, is not an option. Already 40 per cent of China's railroad capacity is taken up by the hauling of more than one billion tonnes of coal a year. Moreover, coal mining in China is plagued by safety issues.

Although China produces 35 per cent of global coal, it also accounts for 80 per cent of the world's coal mining accidents. More than 6,000 miners were killed in accidents in 2005 alone. Faced with a chronic pollution problem, China also has to take into account the negative impact of greenhouse gases.

A further cause for the new emphasis on nuclear energy is China's growing reliance on foreign oil, which has many within the government establishment concerned. China was a net exporter of oil not so long ago. Today it imports one-third of its oil requirements.

At a recent conference on energy issues in the Asia Pacific region, held in Beijing, Steven Kidd, Director of Strategy for the London-based World Nuclear Association, put forth his case arguing the benefits of nuclear technology to a room full of eager Chinese Government officials. As he listed the environmental advantages and benefits to security of energy supply that nuclear energy would purportedly bring, he was obviously preaching to the converted. "Nuclear industry has been declared a strategic industry," said Chen Hua at the same conference. "We need this power. It is an economic imperative."

Mr. Chen went on to explain China's "multi-pronged strategy" for achieving its nuclear ambitions. Rather than reinventing the wheel, China has imported commercial power plants from Russia, France, and Canada, allowing for an absorption of a variety of technologies and the training of a generation of local engineers.

The ultimate goal is to improve China's own design and construction capabilities so that it will not have to rely on foreigners to build and operate the country's reactors. China's contracts with foreign firms are thus structured to maximise technology sharing. A strategy that many analysts believe will enable it to leapfrog the world in nuclear power technology, even though China entered the race late.

The desire for a piece of China's nuclear pie has the cream of the international nuclear-power industry queuing up. Currently the U.S.-based, Japanese-owned Westinghouse, France's Arvea, and Russia's AtomStroyExport are battling it out for an $8 billion contract for the construction of four nuclear reactors in Guangdong and Zhejiang provinces, given the go-ahead by the Chinese authorities last year. These are expected to come online in 2012.

Beijing has repeatedly postponed a decision on the bid, in order to squeeze maximum concessions from the bidders on technology sharing, according to industry watchers. CNNC director Yu Jianfeng said at the World Energy Conference in Sydney that 70 per cent of the equipment for the new reactors will, in fact, be Chinese-made.

By taking what it can from the rest of the world in terms of technology and design, China hopes eventually to develop indigenous conventional nuclear plant designs, in order to give it an independent production capability for domestic use as well as for export. "Already we can develop 300MW and 600 MW PWRs (pressurised water reactors) by ourselves and currently we are experimenting with designing an indigenously developed 1000MW PWR which we should have before the next five years," said Mr. Chen.

Indeed a 300-MW reactor in Qinshan, Zhejiang province, was designed in China and built with 70 per cent of its components produced domestically in 1991. In the second phase of its domestic R&D programme, two 600-MW indigenously developed reactors were installed in Qinshan, which became operational in 2002 and 2004.

Regarding exports, China assisted Pakistan in building its Chashma-1 300-MW nuclear reactor in 1999. In 2004, China's First Heavy Industries Company won a bid to supply the Chashma-2 reactor's pressure vessels. As recently as last month, Pakistan President Pervez Musharraf was in Beijing, asking for Chinese assistance in further developing his country's nuclear energy programme, having been rebuffed by the U.S.

R&D effort

Another key component of China's energy programme is the research and development of next-generation nuclear technologies. Later this year a $370 million, 190 MW nuclear plant using `pebble-bed technology' is expected to begin construction. Built by the China Huaneng Group, the country's largest electricity generator, the power plant will use new high-temperature, gas-cooled reactor technology instead of the pressurised-water type.

China began its research into this technology in the 1990s at Tsinghua University in Beijing, and using German-licensed technology began to construct an experimental $30 million, 10 MW pebble bed reactor in 1995. This reactor was eventually incorporated into the power grid in 2003.

It is theoretically impossible for pebble bed reactors to melt down since even if all safety devices were switched off, the reactor cannot achieve high enough temperatures to melt its own materials and therefore would simply cool down slowly, remaining physically undamaged.

The only other country actively working on commercial pebble bed reactors is South Africa, but pressure from environmentalists means that development there has faced many delays. China is thus expected by many experts to finish first. Other countries are potentially interested in the technology not only because it addresses safety issues but also because one of its by-products is hydrogen, potentially an alternative source of energy to oil.

China is also embarking on a fast breeder programme, with Russian assistance. The first phase involved the construction of a 25 MW breeder reactor as a technology demonstrator, and it is hoped to have a prototype 600 MW fast breeder reactor built by 2015.

In Asia, China is not alone in its nuclear ambitions. India too hopes to add at least 20,000MW of nuclear capacity over the next 20 years and is actively pursuing a fast breeder programme. Unlike China, however, India has had to develop its nuclear programme in isolation from the global nuclear marketplace. Whether it can achieve its goals depends on a variety of factors, not least of which is the approval of the U.S. Congress on the Indo-U.S. deal.

Nonetheless, given the ravenous appetite of both Asian giants for energy, together accounting for some 35 per cent of the growth in global energy demand, the World Nuclear Association's Steven Kidd predicts that when it comes to nuclear technology, this will indeed be an Asian century.

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