Energy & Resources

Undeterred by Fukushima

China’s nuclear power industry in growth phase

A view shows the 4th unit of Tianwan Nuclear Power Plant under construction after its ground breaking ceremony in Lianyungang

Atomic pace: a new nuclear power plant under construction in Jiangsu

In 1979 a Hollywood thriller called The China Syndrome topped the American box office with its fictional portrayal of a nuclear power industry that endeavoured to hide their safety hazards. The film’s title referenced a reactor melting through its containment structure into the Earth’s core and then out through the other side of the world into China. Less than two weeks after the film’s release, a reactor really did start melting down at Three Mile Island in Pennsylvania.

Should the world be ready for a sequel where contamination from a Chinese reactor starts seeping onto American soil? In a bid to combat air pollution, China is embarking on the world’s biggest nuclear power programme. And aside from the size of the build-out, the speed of the planned construction has also raised some concerns.

Sun Qin, chairman of China National Nuclear Corp (CNNC), recently told Reuters that China is building 31 new reactors capable of producing 40 gigawatts (GW). This means almost doubling the number of reactors that were in operation at the end of 2013 (there were 17).

But by 2020 it also hopes to have a further 38 reactors under construction, with plans to expand capacity to 200GW by 2030. The China Daily reports that a total of 150 plants are at various stages of consideration, which amounts to one third of the 435 plants operating commercially around the globe.

Beijing has a target to generate 15% of its power from non-fossil fuels by 2020, with nuclear and solar power expected to take on much more of the load. Currently, nuclear accounts for just 2.1% of power generation compared to almost 80% for coal. This is lowest ratio of the 32 countries monitored by the World Nuclear Association. France, at the other end of the scale, generates 74% of its needs from nuclear. The US generates 19% but is the world’s largest producer overall.

Of course, the Chinese authorities bridle at suggestions that safety might be comprised in the build-out. Plant approvals had ground to a halt after the disaster at Fukushima in March 2011, they say, so that lessons could be learned. These included temporarily halting approvals for reactors in regions where earthquakes are more frequent; earmarking $13 billion to improve safety standards at existing sites through to 2015; and moving more quickly to third generation reactors using Westinghouse’s AP1000 technology.

In December last year China also signed an agreement with Japan and South Korea to cooperate more closely in nuclear safety.

But the domestic press has been refocusing attention on the sector recently, after an incident in Nanjing in which a piece of highly radioactive equipment went missing for more than three days.

The bracelet-shaped device was being used to test metal casings at a construction site. Then it disappeared. Yu Jianjun, director at a community office, finally found it in some bushes while helping the police with their search. “I’ve never run so fast,” he told the China Daily. “I can’t say I wasn’t afraid, but the material needed to be removed.”

The missing equipment had been picked up by a cleaner who thought it might make a nice key ring. Having kept it in his pocket for a few hours, he then decided he didn’t want it and threw it away during his lunch break. The China Daily reports that the man is currently in hospital suffering from acute radiation sickness.

NetEase then reported that China has suffered 40 times more radioactivity-related accidents than the US. It also highlighted a survey from a decade ago which suggested that 2,000 radioactive units had gone missing from domestic institutions including hospitals, factories and scientific laboratories. Many had been melted down into scrap metal.

The potential dangers first came to public attention in 1996 when a 21 year-old man called Song Xuewen discovered a similar key chain-shaped device to the one lost in Nanjing. He liked the look of it, putting it in his pocket. It cost him both legs and one of his arms. Ironically, a film about his experience was released on the same day that Japan’s Fukushima plant exploded in 2011.

Anxiety about lax handling of radioactive equipment isn’t confined to China. But one of the concerns about China’s ambitious nuclear programme is that there are too many gaps along the industry’s supply chain, ranging from a lack of qualified personnel to unpredictable ordering of uranium material.

Last year, China imported 18,968 tonnes of uranium concentrate, or close to three times its current annual need, according to the World Nuclear Association. But industry insiders say the differential is due to stockpiling concentrate to meet future requirements while uranium costs less. Last week uranium oxide spot prices fell below $30 per pound for the first time since 2005 (an amount that’s below the estimated cost of production).

But analysts are more bullish about long-term prices as China has few domestic sources of uranium and relies on Kazakhstan, Australia and Uzbekistan for 95% of its imports. Both of its major state-controlled operators, CNNC and China General Nuclear Power Corp (CGN), have responded by going on an aggressive acquisition spree. In January, for instance, CNNC bought 25% of Paladin Energy’s uranium mine in Namibia, one of the world’s largest.

Both CNNC and CGN are also seeking stock market listings to boost funds for expansion. CGN hopes to raise about $2 billion from a dual Shanghai and Hong Kong listing during the third quarter, while CNNC subsidiary China National Nuclear Power Company (CNNP) released a prospectus for its Shanghai listing last week.

The listed company will own the group’s existing plants and hopes to raise Rmb16.25 billion ($2.6 billion) to fund 10 more reactors at four more sites in coastal provinces. If it is completed, the IPO will rank as China’s largest domestic listing since 2010. It will also give investors their first pure exposure to China’s nuclear industry. To date the investment options have been limited to the two companies’ uranium extraction arms, which are listed in Hong Kong.

Additionally Hong Kong-listed CLP Holdings has a 25% stake in Guangdong’s Daya Bay plant, the country’s oldest commercial nuclear power station. Daya Bay is a foretaste of what China hopes to achieve as it puts a greater emphasis on nuclear power to generate a greater proportion of its electricity needs. Had it been a coal-fired Daya Bay’s emissions would have amounted to 20 years worth of vehicle fumes in the nearby city of Guangzhou, local media has reported.


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