China to Dominate Nuclear as Beijing Bets on Homegrown Reactors.

Nuclear Powerhouse

China has dramatically expanded nuclear capacity since 2010

China had almost 49 gigawatts installed as of 2019 and should get into the mid-fifties this year. New plants, or adding reactors at existing facilities, takes years to plan and construct, and a three-year freeze on approvals that ended in 2019 has thinned the pipeline for this decade, according to BloombergNEF’s lead nuclear analyst, Chris Gadomski.

At the annual parliamentary meeting in Beijing that ended last week, delegates suggested China should start construction on 6 to 8 reactors a year. Employment is now the top priority for China’s leadership, and a typical 1-gigawatt reactor could create 50,000 jobs, according to one company official.

The ramp-up would likely take share from coal. For all of Beijing’s pledges to mitigate climate change, promote renewables, and phase in gas as a replacement, the dirtiest fossil fuel still accounts for well over half of the nation’s power needs. And while its proportion of the energy mix is shrinking, a growing economy dictates that total consumption is still near record levels.

Nuclear Tech

China and the rest of the leading nuclear nations have been “assessing which nuclear technologies will dominate in the decade ahead,” said Gadomski. The four units green-lit last year are homegrown Hualong One reactors developed by China National Nuclear Corp. and China General Nuclear Power Corp. They’ll still compete with other designs, including from abroad, and must prove themselves to be safe, but at the same time their approval is a clear signal on the nation’s favored path forward.

The first Hualong One reactor is expected to start operating in Fujian province by the end of this year.

“Government regulators have delayed approvals of new units and are waiting for new, domestic reactor-types under construction to be completed and demonstrate successful and safe operation,” said Alex Whitworth, research director at Wood Mackenzie Ltd. “This is likely to happen in the next year, and should lead to a new round of permitting of nuclear plants using domestic Chinese technology.”

The National Energy Administration, which oversees China’s nuclear fleet, didn’t respond to a request for comment on this story.

WoodMac’s expectation for China’s capacity in 2030 is more than 100 gigawatts. “This implies that China is becoming a global nuclear technology leader, even as other countries turn away from nuclear,” said Whitworth.

Obstacles?

So what could upset the predictions?

While China’s vast bureaucracy and competing fiefdoms create their own risks around the number and pace of approvals, among external pressures, the coronavirus looms large. Reduced power demand due to China’s lockdown earlier in the year has already seen CGN Power delay projects and cut spending for 2020. Further waves of infection unchecked by a vaccine would only see the industry hunker down even more, and could throw its longer term goals into doubt.

And then there’s the potential for public opposition to nuclear, which has hobbled the restart of Japan’s fleet of reactors. Protesters have successfully forestalled the industry’s spread inland from coastal areas, and a nuclear fuel factory in Guangdong province was canceled in 2013 amid local opposition. The effective disposal of nuclear waste remains a concern, with the development of a site in Jiangsu halted in 2016 after drawing protests. But the resistance to nuclear has died down somewhat in recent years.

So perhaps the biggest threat comes from elsewhere in China’s clean energy stable. The nation’s growing expertise and emphasis on solar and wind power, and the chunky up-front costs for nuclear and its troubled safety record, suggest that if atomic energy does end up taking a backseat, it could be due to the broader success of renewable energy.

Which brings the discussion back to technology. New reactors “will need to offer the benefits of being cheaper, safer and smaller, and perceived as complementary to renewables,” said BNEF’s Gadomski.

• On that comparison with Germany, installed capacity of 130 gigawatts would cut annual carbon dioxide emissions by about 746 million tons, assuming average operating levels are similar to last year’s, according to a calculation based on data from the China Nuclear Energy Association. Germany’s annual emissions from burning oil, gas and coal were 726 million tons in 2018, according to BP Plc data.

— With assistance by Jason Rogers, Feifei Shen, and Jing Yang

2 June 2020

Bloomberg Green