Nuclear Reactors 299 - U.S. and China Renew 123 Nuclear Trade Agreement
The United States has bilateral agreements with a number of countries concerning trade in nuclear materials, technology and information. These agreements are necessary before there can any nuclear trade between the U.S. and another country. They are covered under subsection 123 of the U.S. Atomic Energy Act of 1954.
The U.S. and China signed a "123" agreement in 1985 for a thirty year period. With the arrival of 2015, the thirty years of the original agreement have passed and that agreement has expired. In order for the U.S. and China to continue nuclear trade, it was necessary to renew the agreement. The U.S. nuclear industry represented by the Nuclear Energy Institute (NEI) strongly urged the U.S. government to renew the agreement.
In April of this year, President Obama approved this renewal and sent it to Congress for review. The Senate Foreign Relations Committee and the House Foreign Affairs Committee reviewed the renewal in continuous session for the required ninety days and the agreement entered into force. The renewal of the agreement means that projects such as Westinghouse's AP1000 reactor exports which depend on the participation of many U.S. based manufacturers and other U.S. China nuclear collaborations can continue without interruption.
The NEI reacted to the renewal with a statement from the institute's vice president for suppliers and international programs with the statement: "The nuclear energy industry applauds the renewal of the US-China agreement for nuclear energy cooperation." It has been estimated that the renewal of the agreement will result in direct economic benefit to the U.S. of between seventy and two hundred billion dollars between 2016 and 2040.
China has extremely ambitious goals for the development of nuclear power in China. They are currently constructing twenty two new nuclear power reactors and plan to build many more. An additional seventeen are slated to begin construction in 2017. There have been calls to build as many as one hundred by 2030. The AP1000 design has become the standard design for many of the planned Chinese reactors. The NEI said "The continued US presence in China's nuclear energy market and China's adoption of US technology and operating plant exchanges will deepen its relationship with the United States and advance international nuclear safety practices."
As always, the NEI is very optimistic about the future of nuclear power. With respect to the U.S.-Chinese agreement, I have to question just exactly how much the U.S. will benefit. China is working hard on creating their own reactor designs based on the AP1000. They also intend to make Chinese nuclear power reactors a major export item. They are developing their own industries to supply the components for the Chinese versions of the AP1000. Westinghouse is already planning on including components from Chinese manufacturers in their AP1000 projects for other countries.
It is virtually certain that at some point, China will be building AP1000-based reactors without the partnership of Westinghouse. If this comes to pass, then I would have to say the actual U.S. economic benefits from nuclear trade with China will fall at the low end of the estimated range or perhaps even fall below the lower end of the range. Far from being continuing customers for U.S. nuclear reactors and components, I believe that China intends to become a major competitor.
AP1000 under construction in Zhejiang province in China:
