Part Two of Two Parts (Please read Part One first)
Yesterday, I blogged about problems with completion of nuclear power reactor projects in China that may cause them to fall short of their goals for fifty eight gigawatts of new installed nuclear capacity by 2020. They are having serious problems with completing reactors purchased from foreign vendors. Today I am going to talk about general issues with China's energy sector.
Due to a decline in the growth of demand for electricity, China currently has a surplus of power generation capacity. Nuclear has to compete with cheap coal which is a preferred energy source for heating homes and factories during the winter in China. Altogether, nuclear power only accounts for about three percent of China's electricity. Even though China has serious nuclear ambitions, analysts say that it is unlikely that nuclear power will ever supply more than ten percent of the electricity consumed in China. Several Chinese power reactors either operated at reduced capacity or were temporarily shut down in the past year due to low demand.
Another problem for the Chinese nuclear industry is the strain being placed on the regulatory agency that oversees the industry. The Chinese National Nuclear Safety Administration (NNSA) is currently monitoring the existing thirty six nuclear power plants and overseeing the construction of twenty new nuclear power plants. In addition, the agency has to review six new nuclear power reactors designs. In 2014, a French nuclear safety expert said that, in his opinion, the NNSA was being "overwhelmed" by its workload. In 2015, a senior official from State Nuclear Power Technology Company, the Chinese company building four Westinghouse AP1000 reactors, said "Our fatal weakness is our management standards are not high enough."
China will not be able to reach its goal of fifty eight gigawatts of new capacity by 2020. They will have to revise their timetable. They will also have to insure that new nuclear capacity can be built cheaply enough to compete with cheap fossil fuels and renewable sources which are getting cheaper every day. If China cannot accomplish this, they may have to abandon their plans for construction of dozens of new power reactors.
In 2013, China has made a major commitment to the nuclear export market. They are very competitive with other nuclear exporters because they can offer a nuclear package including equipment, construction expertise, financing and training at a lower cost. They have a great deal of recent experience in nuclear power plant construction. They are investing in the Hinkley Point C power plant project in Britain because part of the deal will allow them to build a demonstration model of one of their own designs, the Hulong One in Britain. Despite all of these factors, so far they have enjoy little success in the nuclear export market. This is partly because the global demand for new nuclear power reactors is soft.
Much of the market for new nuclear power reactors lies in the developing nations. These countries have often tried and failed to launch nuclear projects on their own. There are also issues with risky financing and official corruption in developing nations. China would like to extend its international influence by selling power reactors to developing nations. However, if the global market for nuclear power reactors does not improve in the near future, China may decide that its focus on nuclear technology exports has been a mistake and seek other export energy markets such as solar and wind.
Chinese National Nuclear Safety Administration logo:
