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China’s Inland Civil Nuclear Strategy: Making the Case at Home First
By Tristan Kenderdine

Western environmental and energy policy communities have long berated China for refusing to abandon its reliance on thermal coal, the lifeblood of its industrial economy. But China’s commitment to expanding renewables has actually been extraordinary. Solar energy only became a viable solution in most OECD economies in 2013, after China had poured into the market and made cells affordable. A similar story occurred in 2016 with batteries for electric vehicles and hybrids; these only became a reality once Chinese component-makers could produce batteries cheaply enough to create economies of scale.

 

But China’s coal emissions have not peaked. While renewables are taking a larger share in China’s energy mix, they are still mired in curtailment and subsidies, both upstream and downstream. Fossil fuels are slated to dominate China’s energy generation until at least 2030.

 

But one important policy change will affect not only China’s emissions targets, but also the future energy options of less developed countries: China’s subsidized inland nuclear power reactors. Nuclear is set to expand from 43 gigawatts electrical (GWe) in 2018 to as much as 281.8 GWe by 2030 (see Figure 1). This would take nuclear-generated electricity from 2 percent to up to 20 percent of China’s energy mix.

 

 

 

Inland civil nuclear systems require river water for coolant, a problem China is solving by using the Yangtze River basin. The deployment of next-generation nuclear reactors using river water for coolant, though, has no precursor in terms of scale. However, if China’s model proves successful, I expect to see it replicated across river systems throughout the developing world. China is planning to expand energy equipment capacity transfers and energy equipment exports. This means both exporting nuclear energy components and equipment as well as exporting the factories and technologies to manufacture them. While initial nuclear exports have targeted advanced economies such as France and the United Kingdom, the majority of the rollout will be directed toward the Middle East, Africa and South America.

 

This essay builds on emerging literature from energy-policy scholars and practitioners working on China’s energy policy landscape (Wu 2007, Qin et. al. 2015, Zhu and Krantzberg 2014).1 It looks at China’s expansion of civil nuclear energy capacity and the weighting of inland capacity in the expanded energy mix of 2020-30. It then considers the extant policy of exporting energy equipment and capacity, and the possible effects of this current policy and possible future additions to it. Finally, I consider the role of domestic Chinese standards and safety in the development of a Chinese civil nuclear policy that will shape global energy capacity and, in particular, the energy outcomes for less developed countries.

 

China’s River-Based Inland Civil Nuclear Program

 

China nearly doubled its nuclear-generated electricity output between 2013 and 2016.2 China has surpassed Japan to become the world’s fourth-largest nuclear-power country, with total operating installed capacity of 42.9GWe in 2018.

 

Policy priorities frequently shift, and there is frequent disharmony between the International Atomic Energy Agency and the China Atomic Energy Authority on future projections. China has projected 2030 nuclear-power generation capacity to be anywhere from 120 GWe to approximately 320 GWe. The industry association World Nuclear Association, though, provides a breakdown of firmly planned and loosely planned nuclear plant construction by plant site, unit number and MWe capacity. By aggregating these disaggregated figures, we get a much firmer picture than central policy announcements.

 

By April 2015, 23 reactors with total installed capacity of 21.4 GWe were operating and 27 units with total installed capacity of 29 GWe were under construction.3 By the end of that year, equipped capacity for operational nuclear units had already reached 28.6GWe, with 29.5GWe under construction, and by 2018 it reached 43 GWe operational with 50.9 GWe under construction, demonstrating a significant rate of growth.

 

Expanding on the 45 current reactors, China has 43 more under construction, with a further 92 slated to begin construction by 2020, and an additional 67 to be completed by a longer-term 2030 projection (see Table 1). This would take China’s operating capacity from 42.9 GWe in 2018 to a massive 281.8 GWe in 2030.4 China’s 13th 5-year plan, covering 2016 to 2020, aimed to reach 58 GWe by 2020 with 30 GWe under construction. China plans to reach a total of 56 working reactors by 2020, to be the world’s second-largest nuclear country.5

 

 To achieve these goals, investment of around 540 billion yuan ($77.6 billion) is needed, according to Zhefu Holding Group, a private company that makes nuclear equipment. Equipment-making is currently dominated by Shanghai Electric, Dongfang Electric Corporation, and China First Heavy Industries, whose production capacity can meet demand of 12 to 15 plants per year.

 

Beijing’s inland plans, mostly concentrated in central China along the Yangtze, Hubei and Hunan will be home to the most reactors outside the coast, with plans also for Jiangxi, Anhui, Henan, Sichuan, Chongqing, Guizhou and northern Guangdong (see Table 2).6 Domestically, three inland nuclear sites, Taohuajiang in Hunan, Xianning Dafan in Hubei, and Pengze in Jiangxi, have been approved by the National Development and Reform Commission (NDRC), and are now awaiting central government response, with 10 provinces planning inland nuclear sites. Traditional coastal nuclear powerhouses Guangdong and Zhejiang will also massively ramp up capacity. On 2017 projections, Guangdong is to get nine new nuclear sites with 28 reactors totalling 36 GWe. Zhejiang will add 15 GWe to its existing 6.141 GWe to remain the heartbeat of the Yangtze Delta. And the Bohai Bay industrial cluster of Liaoning-Hebei-Shandong is to become the third coastal civil nuclear hub, with Shandong moving from no nuclear presence to over 20GWe.

 

 

 

In order for this expansion to be viable, a technological gap must be breached, with the rollout of China’s third and fourth generation nuclear reactors. Two reactors at the China Guangdong Nuclear Power Company Hongyanhe power plant in Liaoning, east of Bohai Bay, will use China’s endogenous third-generation nuclear technology, ACPR1000.7

 

There is obvious opposition to inland nuclear centers on environmental and nuclear-safety grounds,8 particularly given China’s infamous inability to connect investment in electricity generation with regional electricity grids. Currently, coal-burning provinces send electricity to the coast, so they are paying the environmental price for the coast’s economic development dividend. Chinese provincial governments have recently been paying a double price: once for polluting air through the use of thermal coal, and once again through the cost of investing in photovoltaic and wind capacity which has sat unused, curtailing the grid. Nevertheless, China aims to finish transitioning from a large to a strong nuclear country during the 13th 5-year plan, stressing high safety levels.

 

Exports to Developing Countries

 

Beijing’s ambitions for nuclear power-generation go well beyond its domestic economy. Internationally, exports of China’s domestic Hualong 1 and CAP1400 nuclear reactors to Belt and Road economies are designed to replicate the export-oriented development policies of countries such as Germany, Japan and South Korea. Nuclear power plants have much the same follow-on industrial effects as the automotive industry or the high-speed rail manufacturing cluster.9 A single nuclear plant generates approximately 30 billion yuan in economic output value, the export equivalent of 300,000 vehicles.10 This is, therefore, a clear industrial policy objective to replace the role that automotive manufacturing played in other East Asian economic development scenarios. If China is serious about nuclear power, then the spillover effects of cheap energy equipment manufacturing will push peripheral countries into China’s nuclear orbit. Co-operation in energy equipment capacity is already a staple of China’s external industrial policy. Countries such as Saudi Arabia and Iran are already in line to benefit from cheap Chinese electricity generating equipment. The effect on global productivity and living standards would be dramatic if Africa, Southeast Asia, the Middle East and Central Asia had access to the cheap, abundant and reliable electricity that Chinese equipment would bring. According to Xie Zhenhua, China’s energy policy envoy, China must embrace inland nuclear power to meet its COP21 commitments.11 But to extend the economic prosperity that cheap electricity brings, China will need to break technological and regional governance barriers to ensure the safe operation of inland nuclear power plants.12

 

As part of its “Made in China 2025” plan, the country is targeting energy equipment manufacturing, including advanced nuclear power. The plan calls for developing a government-led innovation system; increasing financial assistance through, for example, a special development fund; selecting competent enterprises and eliminating backward ones; inducing private capital to promote technological upgrades; facilitating the Belt and Road initiative and “going global” campaigns; and establishing domestic industry standards.13 The “China Energy Technology Innovation Action Plan (2016-30),” issued jointly by the NDRC and the National Energy Administration (NEA) points the way for investment in energy technology. On the nuclear side, this includes deep, unconventional uranium resource exploration; high-temperature gas-cooled, and molten salt reactors; and nuclear fuel disposal. Electricity technologies include advanced storage for renewable energy and the electricity industry; advanced and cheaper power grid technology; global energy interconnection; and energy saving in architecture and transport.14

 

The “Made in China 2025” blueprint is the vehicle for China’s nuclear power industry to go global through the promotion of technological development for advanced nuclear power equipment. This will lead to several major developments: two indigenous large-sized pressurized water reactors — CAP1400 and Hualong One — have been selected as the leading technology to facilitate the global strategy;15 the development of high-temperature reactors (HTR) and fast-neutron reactors are also seen as important for the industry’s global influence; the development of small modular reactors (SMR) is planned to allow China to acquire intellectual property rights in the area of civil nuclear power ship technology and produce a 100 billion-yuan market for offshore oil drilling; and the further development of nuclear recycling technology. Armed with third-generation nuclear power technology AP1000, CAP1400, and its own HL1000, China has already signed contracts or is discussing cooperation with 20 countries including Argentina, Egypt and the UK.16

 

However, cooperation with developed economies in civil nuclear power will likely have geopolitical strings attached. These token projects in the UK and France would mean that the two UN Security Council members could make no complaint if other countries accepted similar offers for China to build civil nuclear projects. Will France or the UK oppose transfer of civil nuclear technologies to Iran or Egypt if they had themselves been beneficiaries? Chinese enterprises developing nuclear power will also experience enhanced market competitiveness with other nuclear powers—Russia, US, France, Japan and South Korea—if Hualong One is successfully built in the UK. China also has signed agreements with Saudi Arabia and Iran to provide energy equipment plants to feed into the countries’ planned nuclear plants. Internationally, exported nuclear plants along the Belt and Road are expected to reach 100 by 2030.

 

In less developed economies, China has already begun administrative processes to export nuclear equipment and nuclear equipment capacity plants. A civil nuclear memorandum of understanding with South Africa is designed to tap into China’s experience, especially in personnel training, technical support and nuclear facility monitoring.17 Elsewhere, the China National Nuclear Corporation (CNNC) is to build Argentina’s fourth nuclear power plant under a $6 billion deal. China will take a 38 percent stake in the project, 85 percent of which will come from its own financial institutions. And a framework agreement has been signed with Argentina that commits it to use Hualong technology in its next power-plant project. China General Nuclear Power (CGNP) will also build four Hualong One nuclear reactors in Kenya, to be operational by 2030.18 China and Slovakia have signed an MoU on developing the nuclear fuel cycle supply chain, while China General Nuclear Power Group (CGN) and Romania’s national nuclear company signed an MoU for Cernavoda nuclear power plant units 3 and 4. It covers the whole life cycle of the nuclear plant, including development, construction, operation, and decommissioning.19

 

Conclusion

 

If China’s policy to export its civil nuclear program is to be successful, it must first demonstrate industrial and environmental policy coordination at home. The new inland nuclear program could bring river-based civil nuclear-generated electricity to new areas of the Middle East, Africa and South America.20 If China intends to sell nuclear equipment abroad, it must first understand the technological and safety risk in its own backyard and ensure that its technology is dependable. A domestic nuclear accident coinciding with a flood on the Yangtze River could be catastrophic. It must also ensure that it promotes effective safety protocols and standards alongside its exports of energy equipment. For civil nuclear power to solve China’s environmental policy woes, it must be policy-complete enough not to export environmental risks to the Middle East, Africa, South America or Eurasia.

 


Notes

1 For contemporary policy discussion, see Yican Wu, “Public Acceptance
of Constructing Coastal/Inland Nuclear Power Plants in post-Fukushima China,”
Energy Policy
, Vol. 101, 2017 pp. 484-491; Ying Qin, Elizabeth Curmin,
Grant M. Kopec, Julian M. Allwood, Keith S. Richards, “China’s Energy-Water
Nexus: Assessment of the Energy Sector’s Compliance with the ‘3 Red Lines’
Industrial Water Policy,” Energy Policy, Vol. 82, 2015, pp. 131-143; and
Jinxin Zhu and Gail Krantzberg, “Policy Analysis of China Inland Nuclear Power
Plants’ Plan Changes: From Suspension to Expansion,” Environmental Systems
Research 2014
, Vol. 3, No. 10.

 



2 Ma Jingjing, “Inland Nuclear Power Station in the Pipeline,” Global
Times
, Feb. 20, 2016, at www.globaltimes.cn/content/1033974.shtml




3 http://news.sciencenet.cn/htmlnews/2015/5/319600.shtm

 



4 World Nuclear Association, at www.world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx




5 Guo Guanghao, “Of 2015’s ten new nuclear power plants, eight are in
China,” Guangcha, April 26, 2016, at www.guancha.cn/Project/2016_04_26_358261.shtml




6 Zhang Qiasu, “China will use peaceful nuclear energy on land, sea
and outer space” — Wang Yidong, deputy director of the National Defense Science
and Technology Bureau, talks about the new highlights of the ‘13th Five-year
Plan’ for the nuclear industry,” Xinhua, Feb. 14, 2017, at http://news.xinhuanet.com/tech/2017-02/14/c_1120466822.htm;
April Ma, “China Moves Ahead with Inland Nuclear Power Plants,” Caixin
Global
, Feb. 13, 2017, at www.caixinglobal.com/2017-02-13/101054690.html;
Yan Ying, “Site Selection of Inland Nuclear Power in the Thirteenth Five-year
Plan,” Feb. 14, 2017, at www.yjbys.com/gongwuyuan/show-544896.html




7 http://energy.people.com.cn/n/2015/0312/c71661-26679872.html

 



8 King, Amy & Ramana, MV, “Moving nuclear reactors inland is a bad
idea,” China Dialogue, Jan. 11, 2016, at www.chinadialogue.net/article/
show/single/en/8525-Moving-nuclear-reactors-inland-is-a-bad-idea

 



9 Zhou Mengge, “Strengthen construction standards to promote nuclear
power ‘Going out’” China Economic News, Feb. 17, 2017, at www.cet.com.cn/nypd/dl/1893804.shtml




10 Xiao Yang, “Bun fight over nuclear materials ‘Going out’ strategy
increasingly clear,” China Environmental Protection Online - Environmental
Protection Industry ‘Internet +’ Service Platform, May 20, 2016, at www.hbzhan.com/news/detail/107168.html




11 Xie Hongchen, “Thirteenth Five-year Plan to Restart Inland Nuclear
Power,” National Business Daily, Oct. 21, 2015, at www.nbd.com.cn/articles/2015-10-21/954998.html



 

12 Huang Ye, “Nuclear Power Expands Inland,” Qiushe, April 15,
2014, at www.qstheory.cn/jj/qyzh/201404/t20140415_340422.htm



 

13 National Development and Reform Commission, Ministry of Industry
and Information Technology, ‘’’Made in China 2025’ and Energy Equipment,” June
12, 2016, at www.ndrc.gov.cn/zcfb/zcfbtz/201606/t20160620_807810.html



 

14 “Energy Technology Revolution,” China Energy News, April 28,
2016, at www.zhgny.org.cn/Detail.aspx?newsId=3238&TId=343;
National Development and Reform Commission and National Energy Administration,
“Notice on Issuance of Energy Technology Innovation Action Plan (2016-2030),”
April 7, 2017, at www.ndrc.gov.cn/zcfb/zcfbtz/201606/t20160601_806201.html;
full plan available at www.ndrc.gov.cn/zcfb/zcfbtz/201606/W020160601304245143804.pdf



 

15 www.yicai.com/news/5030769.html



 

16 http://news.sciencenet.cn/htmlnews/2015/5/319600.shtm



 

17 http://nnsa.mep.gov.cn/zhxx_8953/gzdt/201511/t20151116_317077.html



 

18 http://news.xinhuanet.com/politics/2015-09/08/c_128204950.htm



 

19 www.jiemian.com/article/434469.html;
www.thepaper.cn/newsDetail_forward_1393186



 

20 Zhu Rui, “Inland nuclear power security is assured,” Qiushi,
April 29, 2015, at www.qstheory.cn/zoology/2015-04/29/c_1115134593.htm 

Back to Issue
    In the past several years, there has been a monumental shift in China’s energy policy toward nuclear power. In particular, inland expansion of the country’s nuclear network is slated for the Yangtze River, from Sichuan to the nuclear hub in Zhejiang. But Beijing’s ambitions aren’t limited to its own borders, Tristan Kenderdine writes. Its ‘Made in China 2025’ blueprint envisages vastly expanding China’s role in nuclear power generation in developing economies worldwide.
    Published: Dec 24, 2018
    About the author

    Tristan Kenderdine is Research Director at Future Risk and a Ph.D. candidate at Australian National University’s Crawford School of Public Policy. He was formerly Trade and Industry Research Manager at China Policy in Beijing.

    Download print PDF

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